Falling rents and lower transportation costs are pushing the region’s inflation rate toward its slowest pace since the Great Recession, but consumers still aren’t getting much relief when it comes to the cost of meat and dairy, according to the latest Denver-Aurora-Lakewood Consumer Price Index.
The cost of a basket of local consumer goods declined 0.7% between September and November, pushing down the region’s annual rate of inflation to 0.3%, which is a quarter of the U.S. annual inflation rate of 1.2%, according to the U.S. Bureau of Labor Statistics.
Annual inflation was running a hot 3.8% in metro Denver in January and despite activity coming to a screeching halt because of the pandemic, held at an elevated 3.1% pace in July, three times the national rate.
That is no longer the case. Falling costs for transportation, especially gasoline, and lower rents appear to have reversed that.
Private transportation costs were down 4.9% of the year, aided by a 3% decline in new car prices. Used car prices, however, have shot up 10.5% in the past 12 months as cash-strapped consumers seek lower-cost options.
Gasoline prices, which can be highly volatile, are down 8.6% the past two months and 24.1% over the past 12 months. Vehicle insurance costs are flat, even though people are driving less, but after years of big gains in insurance premiums, even flat helps.
Housing represents the largest cost item in most household budgets and it is the biggest category in the CPI. The cost of shelter is down 2.9% since September and down 0.9% over the past 12 months, and electricity costs are down 0.5% over the year. The cost to furnish a place, however, is up 6.5%.
Colorado consumers still aren’t getting a break on food prices, which are up 3.9%. The cost of eating at home, something people are doing more of this year, is up 2.6% the past year, despite a 3.9% decline in cereals and baked products, a 3.5% decline in nonalcoholic beverages, and a minimal 0.5% rise in fruits and vegetables.
Basically, it is costing Denver consumers a lot more to eat something that comes from an animal. The cost of meat, poultry, fish and eggs have skyrocketed 10.2% the past year, while dairy products are up 5.7%.
And it is costing 5.4% more to eat out this year than last. Because they have limited capacity, restaurants appear not to be following the path taken by another hard-hit sector, hotels, which have lowered rates to drum up business.
Medical care costs are up 1.4%, and tuition costs are up 1.2%, even though many students are complaining that a virtual class shouldn’t cost as much as one conducted in-person.
Clothing costs are down 1.5% on the year, while alcohol beverages are up 1.6%.
Source: Read Full Article