Flattening rents helped keep inflation in check in metro Denver at the start of the year, masking some big gains in prices at the gasoline pump and grocery store, according to an update Wednesday from the U.S. Bureau of Labor Statistics.
Consumer prices rose 0.2% between November and January in the Denver-Aurora-Lakewood area pushing up the annual increase to 2.3% from a 2% gain in November and a 1.4% rate in September. That contrasts with a 0.47% bi-monthly gain and a 3% annual gain measured nationally.
Energy prices were down 1.1% in the past two months and 2.5% on the year in metro Denver, although gasoline prices are up 10.7% on the year. Housing costs, which have a much heavier weighting in the Consumer Price Index, contributed the most to the region’s below-average inflation rate.
Rents are down 0.7% in the past two months and 0.2% over the past year, aided by a surge of new apartment construction that is putting downward pressure on the market.
Housing costs of all types, including an equivalent measure for homeowners and a measure for utility costs, were up only 0.1% in metro Denver the past year compared to a 3.84% gain nationally, Cole Anderson and Jimena Sanchez, analysts with the Common Sense Institute, noted in a report on the local CPI numbers.
Prescription drugs and auto insurance premiums saw some big spikes, but eggs, or the lack of them, have generated the most buzz.
The region’s food index was up 1.6% in the past two months and 4% on the year, noted Michael Hirniak, the BLS’ assistant commissioner for regional operations. Nonalcoholic beverage costs are up 3.6%, but the biggest surge came in the category of meat, poultry, fish and eggs, which rose 5.8% in the past two months and 6.6% the past year.
A breakout isn’t available for metro Denver, but eggs are likely driving much of the increase. Nationally, egg prices rose at a 53% annual pace in January. And as shocking as that may be, in January 2023 the annual gain was even larger at 70.1%. In both instances, a bird flu virus outbreak resulted in the culling of laying hens, with the Department of Agriculture reporting 20 million killed in the fourth quarter. Colorado also has stricter rules that eggs sold must be from cage-free facilities, which may also be adding to costs.
Fresh whole chickens, by contrast, are up only 0.5% in price nationally, so the flu outbreak doesn’t appear to be hitting the young chickens consumers eat as hard as the older birds that lay eggs.
Restaurants are also struggling to keep their prices in check, with inflation for dining out up 5.8% the past year in metro Denver.
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