Although PG&E-linked electricity and gas utility costs remained stubbornly high at year’s end, inflation in the Bay Area eased during the final month of 2024, a new government report shows.

Regional consumer prices rose just 2.4% in December on an annual basis as compared to the same month the year before, the U.S. Bureau of Labor Statistics reported.

The recent pace of inflation is a noticeable improvement from the pattern during 2022 and 2023, when consumer prices in the Bay Area were rising at a high rate.

In June 2022, Bay Area consumer prices peaked at an annual increase of 6.8%. At the time, that was the highest annual increase for inflation in the region in nearly four decades, topped only by a 7.1% year-to-year increase logged in October 1984.

Since the cost summit in mid-2022, Bay Area consumer prices have slowly retreated from that sky-high yearly pace of inflation.

“We have seen a reassuring slowdown in consumer price inflation in the Bay Area this past year,” said Scott Anderson, BMO Capital Markets chief U.S. economist.

It’s unclear whether Bay Area consumers will continue to enjoy the current slower pace.

“The recent spike in electricity prices, insurance prices, and the risk of higher goods inflation this year from new import tariffs, make the outlook for Bay Area inflation for 2025 highly uncertain,” Anderson said.

For most of 2024, the Bay Area inflation rate, measured on an annual basis, ranged from a high of 3.8% in April to a low of 2.4% over the final three months.

In a further sign of hope, consumer prices in the nine-county region in December were down 0.4% compared with October. The federal labor agency releases an inflation report for the Bay Area only every other month.

A steep decline in gasoline prices helped keep a cap on the overall inflation rate in the Bay Area.

“Gas prices are down,” said Liam Kirk, a San Jose resident who was filling up his vehicle at a gas station Wednesday. “I was driving in San Francisco recently with my girlfriend and she pointed out how much lower gas prices are than they have been.”

Nationwide, inflation rose by 2.9% during the same yearlong period ending in December, the Bureau of Labor Statistics reported.

In the Bay Area, a rise in consumer prices was fueled primarily by hefty increases in the cost of electricity and natural gas. Oakland-based PG&E, though, has estimated that starting with billing cycles this month, average payments for residential customers who receive electricity and gas services should moderate from the costs of recent years.

PG&E customers who had to grapple with a string of rate increases in 2024 were promised a respite early this year because combined monthly bills are poised to be only a bit higher compared to a year ago.

A typical PG&E residential customer who receives both electricity and natural gas services from the investor-owned utility could expect to pay about $295 a month starting with this month’s billing cycle.

As a result, the January 2025 average bill is expected to be just $1 higher than the $294 a month that typical PG&E residential customers were paying for combined electricity and gas services in January 2024. It’s also a dramatic turnaround from the increases ratepayers had experienced in recent years.

Food costs for items consumed at home in the Bay Area rose only a tiny amount during December, the federal government reported.

“I’m finding that some food prices are up and some are down,” Kirk said. “I always look for the sales at the grocery store.”

The relatively favorable costs for food consumed at home were primarily due to flat or falling prices for fruit, vegetables, dairy products, cereals, and bakery products.

Meat, poultry, fish and eggs were the exception to this pattern as those food products’ prices rose faster than the overall Bay Area inflation rate. Recent shortages have driven egg prices sharply higher and limited availability.

Prices for food consumed away from home skyrocketed as dining out at restaurants became more expensive, the report found.

“The easing of inflation has got to be a relief for Bay Area residents who have struggled to keep up with high and rising housing costs and food prices over the past three years,” Anderson said.

Here are the details for the changes for key price categories in the Bay Area, measured by the annual change in December 2024:

• Electricity utility services such as those provided by PG&E, up 11.2%

• Gas utility services akin to those supplied by PG&E, up 6.3%

• Gasoline (unleaded regular), down 7.4%

• Food, all categories, up 2.2%

• Food consumed away from home, up 5%

• Food consumed at home, up 0.7%

• Meat, poultry, fish and eggs, up 3.5%

• Fruits and vegetables, up 0.2%

• Cereals and bakery items, down 1%

• Dairy products, down 2.8%

“We are definitely not completely out of the woods yet on inflation, but for now appear to be on the right track” in the Bay Area, Anderson said.