Higher prices for groceries, housing and recreation pushed the cost of living for Wasatch Front residents up 0.3 percent in August, triple the national increase of 0.1 percent, both figures nonseasonally adjusted.

The increases marked the first time that inflation has risen locally in five months, said Kelly K. Matthews, chief economist for First Security Corp. which produces the monthly Wasatch Front Cost of Living Index, released Thursday.The largest increase was in housing costs, measured by rent rates, which jumped 0.9 percent in August, by far the largest rise in any spending category. It was the first local increase in housing costs in four months.

Over the past six months, local costs have risen 0.2 percent, compared with the same period last year and compared to a 1.6 percent increase nationally. Since First Security began tracking local costs in March 1988, overall costs along the Wasatch Front have risen 34.7 percent, compared to 40.1 percent nationally.

Nationally for August, inflation rose 0.2 percent (seasonally adjusted), the same as in July, held down by falling prices for energy, produce and telephone service.

Despite labor shortages that have begun to drive up wages - which can prompt price increases from companies seeking to maintain their profits - inflation nationally is running at a 1.6 percent annual rate this year, down from 1.7 percent for all of 1997.

That's partly because hard times in other countries have dampened world demand for many products, lowering prices on commodities.

Some economists believe the lack of inflation worries could make it easier for Federal Reserve policy-makers, who meet Sept. 29, to lower interest rates. But Federal Reserve Chairman Alan Greenspan, in congressional testimony Wednesday, played down that possibility. That caused the Dow Jones Industrial Average to plummet nearly 200 points in early trading Thursday.

Locally in August, transportation expenses declined 0.5 percent, grocery prices rose 0.4 percent, clothing was down 0.4 percent and recreation costs rose 1.1 percent. Other spending categories were little changed.

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ADDITIONAL INFORMATION

Cost of living index

August 1998 W A S A T C H F R O N T N A T I O N A L

... Index % change (non- Index % change (Seas.

... seas.adj) (non-seas.adj) adj.)

... Mar. 1988=100 6 mos.* 1 mo. Mar. 1988=100 6 mos.* 1 mo. 1 mo.

... prior prior prior

All categories 134.7 0.2 0.3 140.1 1.6 0.1 0.2

Housing 171.1 2.4 0.9 138.1 2.4 0.2 0.1

Transportation 113.0 -7.2 -0.5 132.5 -2.1 -0.4 0.0

Health care 140.5 1.5 0.0 178.5 3.1 0.3 0.4

Food at home 146.6 3.3 0.4 141.8 1.8 0.4 0.3

Clothing 119.5 -2.2 -0.4 115.3 0.0 1.5 1.1

Food away 146.5 1.6 0.0 134.3 2.8 0.2 0.2

Utilities 94.8 0.6 -0.1 120.7 N/A -0.5 -0.4

Recreation 100.6** N/A 1.1 101.3***N/A 0.2 0.1

Education & comm. 100.0** N/A 0.0 100.1***N/A 0.1 -0.5

Other goods & svcs. 100.0** N/A 0.0 174.9***N/A 0.1 0.1

*Last six-month percentage change compared with same period one year ago.

**(Feb. 1998=100 base)

***(Dec. 1997=100 base)

Courtesy of First Security Bank