Consumer inflation in metro Denver rose final month at its quickest tempo in 12 years, in line with the most recent Denver-Aurora-Lakewood Consumer Price Index from the U.S. Bureau of Labor Statistics
The area’s annual inflation price surged to 3.8% in January, up from a 2.6% tempo final yr and a 2.3% tempo in 2018 and above the 2.5% tempo measured nationally in January.
The final time inflation ran hotter in metro Denver was 2008, when it rose 4.1%, and 2017 got here shut at 3.7%. But Kate Watkins, chief economist at the Colorado Legislative Council, warned in opposition to studying an excessive amount of right into a single report.
“The data of individual metropolitan statistical areas are quite noisy and the Denver-Aurora-Lakewood January numbers show significant fluctuations in several components that aren’t likely to hold in future months,” she mentioned.
So what drove the will increase? Gasoline prices have been up 20.6% in January year-over-year, contributing to a 5.5% achievement at transportation prices.
Although costs at the pump are coming down quickly this yr because the coronavirus reduces oil demand worldwide, a gallon of normal unleaded averaged $1.92 a gallon a yr in the past in metro Denver and is operating $2.39 a gallon, in line with the AAA Gas Prices survey.
Food prices general have been up 3.1% with the price of consuming at residence up 1.7% and the price of consuming out up 4.7%. The price of alcoholic drinks fell 1.1%, whereas the price of nonalcoholic drinks rose 13.8% on the yr in January.
Core inflation, which excludes extra unstable power and meal prices, rose at an annual tempo of 3.6% in January in metro Denver.
Housing prices have been up 4.1%, with rents up 3.5% and the equal price of proudly owning a house up 4.5%. Household power prices fell 3%, pushed by flattish electrical energy costs and decrease pure fuel heating prices.
Although it doesn’t maintain a number of weight in the general inflation calculation, attire prices have been up 10.3% on the yr. Given that U.S. clothes retailers import closely from China, that enhances might mirror larger tariffs on imports.
Medical care prices rose 3.5% whereas car insurance coverage prices have been up 4.8%. Both of these gadgets have contributed to inflation in the previous.
Inflation charges are intently watched in Colorado provided that they go into the calculation of how a lot state and native governments can enhance spending underneath the Taxpayer Bill of Rights.
The Colorado Legislative Council, in its December forecast, referred to as for a 2.1% achieve in the patron worth index for 2020, a prediction Watkins is holding to.
She mentioned housing prices, which account for 44.5% of the weighting in the basket of products that decide the CPI, will proceed to level off this yr, preserving inflation nearer to 2% slightly than 3% or larger.