Consumer inflation in Metro Denver has reached its highest level since 2001, when the dot-com boom pushed up prices and wages in the economy.
Measured on an annual basis, the consumer price index for Denver-Aurora-Lakewood rose 4.5% in September, up from a 3.5% annual pace in July and the highest reading since the 4.7% increase recorded in 2001, according to an update from the U.S. Bureau of Investigation. Labor Statistics.
Energy prices in the Denver area are up 33% year-over-year, driven primarily by a 54.8% increase in gasoline prices. Food prices increased by 3.3%, the cost of protein sources such as meat and dairy increased by 4.9% and the cost of food increased by 4.2%.
After removing food and energy, the two more volatile spending categories, “core” inflation is trending at 3.1% in the Denver area. Within the core rate, growth in used car prices remained up 24.8%, and so did the cost of clothing, up 16.8%.
Bank of Waste chief economist Scott Anderson said in a research note, “High shipping costs, rising energy prices, material shortages resulting from supply chain bottlenecks, inflated commodity prices and rising wages all collectively drive consumer prices higher.” increasing.”
At the start of the pandemic, Denver reported the highest consumer inflation rate among US metropolises, but has since fallen back. Its 4.5% inflation rate is well below the 5.4% growth measured nationally in September.
Shelter costs, which account for about a third of the weight in the Consumer Price Index, take longer to “baked in” into official numbers and continue to strain household finances long after used-car and gasoline prices have calmed. can.
Shelter costs in Denver are only 0.7% year-over-year according to official CPI measures, even though apartment listings saw a 16% annual increase in apartment rents in Metro Denver in September. The S&P Corelogic Case-Shiller Home Price Index for Denver reported a 21.3% annual increase in home prices in July, and unlike last year, the gains were not offset by lower mortgage rates.
Home prices have soared nationally that 4.8 million fewer households could afford to buy housing as of 2019, even though mortgage rates are much lower than they were at the time, said Nadia, a senior economist at the National Association of National Association Evangelo said. Realtors said in a research note.
He said consumer inflation is exceeding the average rate on 30-year mortgages for the first time since 1972.
Rising natural gas prices are another item to watch, given that they’re more than what consumers in cold climates like Colorado will have to pay this winter to heat their homes. State’s largest utility Xcel Energy expects residential customers to pay an average of 14.4% more on their residential utility bills from this month.
In another sign of how hot inflation is going, the Social Security Administration plans to pass a 5.9% increase in the cost of living next year, which in turn could put pressure on wage increases that employers have to provide. Will happen.