A graphic shows employment by Alaska region and features the percent change in jobs from December 2020 to December 2021. (Graphic via February 2022 Alaska Economic Trends reports from the Alaska Department of Labor and Workforce Development)

A graphic shows employment by Alaska region and features the percent change in jobs from December 2020 to December 2021. (Graphic via February 2022 Alaska Economic Trends reports from the Alaska Department of Labor and Workforce Development)

Report: Alaska economy rebounding; inflation up

Prices in Alaska increased by 4.9% in 2021

While the economy has rebounded slightly in urban Alaska since 2020, inflation last year was the highest it’s been in three decades, according to the February trends report from the state Department of Labor and Workforce Development.

Prices in Alaska — everything from transportation to recreation and energy costs — increased by 4.9% in 2021, according to the report. That’s the highest annual inflation rate measured by the Consumer Price Index for Urban Alaska since 1990.

The first year of the pandemic prompted a huge disruption to local, national and international markets, and Alaska was no exception.

The economic trends report states that demand for goods and services “plummeted” in 2020, as did prices: Energy costs fell by 10.6%; transportation fell 6.8%.

But in 2021, the economy “began to rebound” and prices started to increase again, one of the most notable being the price of energy, the report said.

Compared to May 2020, May 2021 saw a near 26% increase in energy costs. Last year overall, energy costs rose 14.4% from 2020, which drove 16.9% inflation in transportation.

While forecasting economic trends “can be a fool’s errand,” some economic observers expect inflation to slow in 2022, Neal Fried, a researcher and analyst with the department, wrote in the report.

“The price of oil isn’t likely to rise much further — and supply chain issues work themselves out,” Fried wrote in the report. “However, others expect the opposite, that supply chain problems will persist and we’ll enter a period of higher inflation.”

Read the full report at https://labor.alaska.gov/trends/feb22.pdf.

Reach reporter Camille Botello at camille.botello@peninsulaclarion.com.

More in News

The Aurora Borealis glows over the Mendenhall Glacier in 2014. (Michael Penn / Juneau Empire File)
Aurora forecast

Forecasts from the University of Alaska Fairbanks’ Geophysical Institute for the week of Dec. 3

Mountain reflections are seen from the Mendenhall Wetlands. (Courtesy Photo / Denise Carroll)
Wild Shots: Photos of Mother Nature in Alaska

Superb reader-submitted photos of wildlife, scenery and/or plant life.

Clarise Larson / Juneau Empire 
At Wednesday evening’s special Assembly meeting, the Assembly appropriated nearly $4 million toward funding a 5.5% wage increase for all CBJ employees along with a 5% increase to the employer health contribution. According to City Manager Rorie Watt, it doesn’t necessarily fix a nearly two decade-long issue of employee retention concerns for the city.
City funds wage increase amid worker shortage

City Manager says raise doesn’t fix nearly two decade-long issue of employee retainment

People and dogs traverse the frozen surface Mendenhall Lake on Monday afternoon. Officials said going on to any part of Mendenhall Lake can open up serious risks for falling into the freezing waters. (Clarise Larson / Juneau Empire)
Officials warn residents about the dangers of thin ice on Mendenhall Lake

Experts outline what to do in the situation that someone falls through ice

(Michael Penn / Juneau Empire File)
Police calls for Saturday, Dec. 3

This report contains information from law enforcement and public safety agencies.

Molly Yazwinski holds a 3,000-year-old moose skull with antlers still attached, found in a river on Alaska’s North Slope. Her aunt, Pam Groves, steadies an inflatable canoe. (Courtesy Photo /Dan Mann)


2. A 14,000-year-old fragment of a moose antler, top left, rests on a sand bar of a northern river next to the bones of ice-age horses, caribou and muskoxen, as well as the horns of a steppe bison. Photo by Pam Groves.


3. Moose such as this one, photographed this year near Whitehorse in the Yukon, may have been present in Alaska as long as people have. Photo by Ned Rozell.
Alaska Science Forum: Ancient moose antlers hint of early arrival

When a great deal of Earth’s water was locked up within mountains… Continue reading

FILE - Freight train cars sit in a Norfolk Southern rail yard on Sept. 14, 2022, in Atlanta. The Biden administration is saying the U.S. economy would face a severe economic shock if senators don't pass legislation this week to avert a rail worker strike. The administration is delivering that message personally to Democratic senators in a closed-door session Thursday, Dec. 1.  (AP Photo / Danny Karnik)
Congress votes to avert rail strike amid dire warnings

President vows to quickly sign the bill.

Mark Sabbatini / Juneau Empire
Juneau state Sen. Jesse Kiehl, left, gives a legislative proclamation to former longtime Juneau Assembly member Loren Jones, following Kiehl’s speech at the Juneau Chamber of Commerce’s weekly luncheon Thursday at the Juneau Moose Family Center.
Cloudy economy, but sunnier political outlook lie ahead for lawmakers, Kiehl says

Juneau’s state senator tells Chamber of Commerce bipartisan majority a key to meaningful action

Most Read