San Diego’s inflation rate was 4% in July — fueled primarily by rising prices for food, medical care and cars — making it highest in the nation.

Inflation has typically run hotter in San Diego than much of the U.S. because of high housing and gasoline costs. Yet the past few reports, which are released every two months for metro areas, have made it hard to pin rising costs on any one thing — most sectors have seen increases.

Experts remain hesitant to pin the blame on tariffs yet, focusing more on labor issues, housing costs and other usual culprits. Still, San Diego clearly stands out from other metropolitan areas.

San Diego metro, which includes all of San Diego County, saw its highest rate since 2023 at 4% in July, said data released Tuesday by the U.S. Bureau of Labor Statistics’ Consumer Price Index. It was up from San Diego’s rate in March and May, 3.8%, which also made it highest in the nation (tied with New York in March).

Meanwhile, nationwide inflation stayed steady in July, at 2.7%, and was seen by some in Wall Street as not a huge issue, especially considering it was only a gain of 0.2%. Nearby Riverside was closest to San Diego, with its inflation rate rising to 3.5%. The lowest was Dallas, up 0.9%.

Ray Major, a San Diego economist, said it’s unclear how much of an impact tariffs are having on rising costs because he estimated it would be up to a year before experts could really show how they affected the economy. However, he said labor costs are likely a large reason why Southern California is seeing higher inflation.

Major cited the $20 an hour California minimum wage for fast food workers as having an outsized effect because workers in other industries may be tempted to leave. One wrinkle in July’s data showed San Diego County’s cost for tuition, school fees and child care was up 9.4% in a year.

“Why would someone work for $15 an hour in child care?” Major said.

He and other experts also pointed to the federal government’s crackdown on undocumented workers as likely another factor in labor woes. That is harder to track because most were paid under the table.

The San Diego Regional Chamber of Commerce estimates up to 60,000 Tijuana residents cross into San Diego County to legally work every day. The Mexican workforce might point to one reason why San Diego is feeling the effects more, said Alan Gin, economist at the University of San Diego.

“That would disrupt the labor market and raise costs,” he said. “I have to think, because we are a border city, that we probably have a disproportionate share of legal and illegal migrant workers.”

From May to July, San Diegans probably felt the pain most in their wallets at the grocery store, doctor or car lot. Medical care was up 3.1% in the two-month period, used car and truck prices were up 1.9% and food costs rose 1.1%.

On an annual basis, here are the areas where prices changed in San Diego County:

•Motor fuel: The price for unleaded regular was down 4%; unleaded midgrade was down 3.8%; and unleaded premium was down 3.5%.

•Food: Cereals and bakery products were up 3.2%; dairy, also up 3.2%; fruits and vegetables, up 3.1%; and meats, poultry, fish and eggs were up 7.3%.

•Shelter, including rent and owners’ equivalent of rent, was up 5%.

•Transportation costs, which include automobile maintenance, vehicle parts and car insurance, were up 5.1%. Used car and truck prices were up 5.3%.

•Apparel: Down 12.4%.

•Tuition, other school fees and childcare: Up 9.4%.

•Medical care: Up 6.8%.

One area where tariffs, specifically aluminum, could reasonably be attributed to rising costs was for nonalcoholic beverages and beverage materials, which are up 8.2% year over-year.

When volatile food and energy costs are removed from the overall inflation rate, so-called core inflation in San Diego County saw a 4.2% annual rise, down slightly from 4.3% in May.

Nationally, inflation was highest in the Northeast at 3.2%. It was followed by the West at 3%, Midwest, at 2.6%, and the South at 2.3%.

Inflation rate by metro area (July 2025)

San Diego-Carlsbad, CA: 4%

Riverside-San Bernardino-Ontario, CA: 3.5%

Tampa-St. Petersburg-Clearwater, FL: 3.3%

Boston-Cambridge-Newton, MA-NH: 3.2%

Los Angeles-Long Beach-Anaheim, CA: 3.2%

New York-Newark-Jersey City, NY-NJ-PA: 3.2%

Chicago-Naperville-Elgin, IL-IN-WI: 2.7%

Urban Hawaii: 2.3%

Denver-Aurora-Lakewood, CO: 2.1%

Washington-Arlington-Alexandria, DC-VA-MD-WV: 2%

Minneapolis-St.Paul-Bloomington, MN-WI: 1.8%

Dallas-Fort Worth-Arlington, TX: 0.9%

(Source: U.S. Bureau of Labor Statistics’ Consumer Price Index)

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