In this piece, we will take a look at the 30 most expensive cities to live in the U.S. For more cities, head on over to 5 Most Expensive Cities to Live in the U.S.
Inflation is the top topic in the news these days. The cost of living crisis is affecting people living in every region of the world. Data from the Organization of Economic Cooperation and Development (OECD) shows that inflation in OECD countries continues to be at its highest since the 1990s. In fact, inflation in the OECD countries stood at 7.84% in November 1990, a level that it did not touch for more than two decades until March 2022. From December 2020, when the worst effects of the COVID-19 pandemic were starting to wear off, inflation had been on a consistent uptick until October 2022, dipping by an indistinguishable margin only in June and August 2022.
Yet, even as most Americans suffer from inflation, salaries in the technology sector are quite high. This is due to a scarcity in the sector despite the fact that numerous graduates with degrees finish their courses each year. According to a 2021 study, the average technology salary in the U.S. was $104,566 with IT management salaries growing by 6% to a whopping average of $151,983 in 2022. The second highest salary bracket was for software developers, who raked in a cool $120,204. However, if you thought this was high, wait till you see the salaries offered at Apple Inc (NASDAQ:AAPL). Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG). After California’s law mandated the firm to share salary ranges in job advertisements, it was revealed that a director at Microsoft Corporation (NASDAQ:MSFT) could make as much as $277,000 while a Google vice president could rake in an eye-popping $550,000. These high salaries have led to calls for cost cutting at the firms, and it seems that major tech companies are responding to these demands, causing their stock prices to recover. For instance, when Google announced 12,000 layoffs in January, the firm’s share price jumped by nearly 6%.
Data from the U.S. shows that America has fared relatively better than the broader OECD grouping, which also includes Europe and Japan. In America, inflation peaked in June 2022 when it stood at 9.06% and has been on a downward trend since then with OECD’s figures showing a 6.41% annual price growth in January 2023. The latest data for America, which covers inflation in February, shows that inflation continued to drop with the figure coming in at 6% during the month. European inflation matched the broader OECD trend, with inflation peaking at 10.6% in October 2022, but like other regions, dropping since then and being on a consistent downward trend. The European data shows that a large chunk of this inflation came from energy and food, as inflation without food and energy was significantly lower. For instance, for the 10.6% October reading, more than half was contributed by food and energy as core inflation itself stood at 5%. Moving over to America, core inflation was 5.92%, indicating that prices in America were more due to consumer spending as large savings built during the coronavirus pandemic made their way into the economy in the form of spending.
While at one end economists and analysts are worried about inflation, at the other they are also worried about the effects of the Federal Reserve’s efforts to combat it. These efforts have been the center of widespread coverage last year since they disrupted the stock market and corporate working capital at the same time. Since March last year, the Federal Reserve has raised interest rates by 4.50% which in turn has diverted funds away from the stock market into safer investments such as bonds and bank savings accounts. At the same time, it has also increased the costs of borrowing for companies who have to borrow during their turnover cycle to fund manufacturing and inventory before the revenue starts to flow in.
However, the Fed’s latest interest rate hike, which came in March as well, shied away from a stronger 50 basis point (0.50%) hike as the banking system came under stress. To recap SVB Financial Group (NASDAQ:SIVB) collapsed in March as well due to a bank run on its deposits. The bank had shared earlier in the year that it had to book massive losses on its balance sheet, as large chunks of its capital were tied up in long term bonds bought at a time when interest rates were low. As the rates went up, these bonds fell in value and the bank had to book massive losses, which shook up confidence in it and it never recovered.
As part of its prepared statements released after its latest policy decision, the Federal Reserve maintained that it might have to ‘firm up’ its policy to further drive down inflation. The bank shared:
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-3/4 to 5 percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
Pixabay/Public Domain
With these details in mind, let’s take a look at some of the most expensive cities to live in the U.S.
Our Methodology
To compile our list, we used figures from Numbeo’s cost of living index for American cities to determine the most expensive cities in America.
Most Expensive Cities To Live in the U.S.
30. Birmingham, Alabama
Cost of Living Index Reading: 75.8
Birmingham is a city in the U.S. state of Alabama and is relatively smaller in terms of population with almost 200,000 residents.
29. Cleveland, Ohio
Cost of Living Index Reading: 76.1
Cleveland is one of the economic hubs in the U.S. state of Ohio, as several large firms are present in the area. It was also home to one of the oldest stock exchanges in America until 1949.
28. Minneapolis, Minnesota
Cost of Living Index Reading: 76.2
Minneapolis ranks in America’s top fifty largest cities in terms of population. Some of America’s largest companies, such as Target and U.S. Bancorp, are headquartered in the city.
27. Omaha, Nebraska
Cost of Living Index Reading: 77.0
Omaha is the largest city in Nebraska and houses close to half a million residents. It is known to have produced one of the world’s foremost investors, Warren Buffett of Berkshire Hathaway.
26. Forth Worth, Texas
Cost of Living Index Reading: 77.1
Forth Worth is based in Texas and was incorporated in 1874. Well-known firms such as American Airlines and RadioShack are headquartered in the city.
25. Dallas, Texas
Cost of Living Index Reading: 77.6
Dallas is one of the most populous cities in the U.S. with more than a million residents. It is also home to major firms such as AT&T and American Airlines.
24. Pittsburgh, Pennsylvania
Cost of Living Index Reading: 78.3
Pittsburgh is one of the oldest cities in the U.S. with a history that dates back to before the American revolution. It is home to major U.S. firms such as Kraft Heinz and U.S. Steel Corporation.
23. Buffalo, New York
Cost of Living Index Reading: 78.3
Buffalo has the honor of being the second most populous city in New York state after New York City. Major American car companies such as Tesla and General Motors have a presence in the area.
22. New Orleans, Louisiana
Cost of Living Index Reading: 79.4
New Orleans has been around for more than 300 years. It is an economic hub with one of the busiest ports in the world.
21. Philadelphia, Pennsylvania
Cost of Living Index Reading: 79.8
Philadelphia played a crucial role in the American Revolution.
20. Charlotte, North Carolina
Cost of Living Index Reading: 79.9
Charlotte is one of the most populous cities in the American Southwest and has the largest banking sector after New York City.
19. Los Angeles, California
Cost of Living Index Reading: 80.1
Los Angeles is the second most populous city in the U.S. and an economic hub within California and the U.S.
18. Nashville, Tennessee
Cost of Living Index Reading: 80.4
Nashville is the capital of the U.S. state of Tennessee and one of the oldest cities in the U.S., which was founded soon after the American Revolution.
17. Raleigh, North Carolina
Cost of Living Index Reading: 80.6
Raleigh is the capital city of North Carolina and was chartered at the close of the 18th century, in 1794.
16. Miami, Florida
Cost of Living Index Reading: 81.6
Miami is one of the most prosperous cities in the U.S. and an economic hub in Florida especially since it’s a port city.
15. Denver, Colorado
Cost of Living Index Reading: 81.7
Denver is the capital city of Colorado and is known for its vibrant aerospace industry that supplies spacecraft, aircraft, and helicopter parts.
14. Chicago, Illinois
Cost of Living Index Reading: 81.8
Chicago is the third most populous city in the U.S.
13. San Diego, California
Cost of Living Index Reading: 84.3
San Diego is known for the strong presence of the U.S. military and its deepwater port with ship and submarine building facilities.
12. Portland, Oregon
Cost of Living Index Reading: 84.4
Portland is known for its port facilities as well as the presence of athletic apparel companies such as Nike and Adidas.
11. Washington, D.C.
Cost of Living Index Reading: 84.8
Washington D.C. is the capital of the U.S. which naturally leads to the federal government being one of the largest employers in the city.
10. Sacramento, California
Cost of Living Index Reading: 85.1
Sacramento is the capital city of the U.S. state of California. It is known to headquarter the U.S rocket engine company Aerojet Rocketdyne.
9. San Jose, California
Cost of Living Index Reading: 86.6
San Jose is known as a major technology hub in the U.S. with firms such as Lockheed Martin, Qualcomm, HP, and others having a presence there.
8. Anchorage, Alaska
Cost of Living Index Reading: 86.6
Anchorage is the largest city in Alaska with close to half of the state’s population present in the city.
7. Boston, Massachusetts
Cost of Living Index Reading: 87.2
Boston is the capital city of Massachusetts and a major technology and financial hub in the state.
6. Seattle, Washington
Cost of Living Index Reading: 93.2
Seattle is the largest city in the state of Washington and sits in the list of the top 20 U.S. cities in population terms.
Click to continue reading and see 5 Most Expensive Cities To Live in the U.S.
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Disclosure: None. 30 Most Expensive Cities To Live in the U.S. is originally published on Insider Monkey.