Consumer prices in metro Denver drop 0.2% between July and September

A big drop in prices at the pump pushed down consumer prices in metro Denver between July and September and offset rapidly rising food and housing costs, according to the latest Consumer Price Index for Denver-Aurora-Lakewood.

Consumer prices fell 0.2% between July and August in the metro area, compared to price gains nationally. That helped push down year-over-year consumer inflation to a 7.7% rate, down from an 8.2% annual rate measured in August and below the 8.2% annual inflation rate measured nationally in September.

A big driver of that short-term drop in metro Denver was a 22.1% decline in the cost of gasoline between July and September. It was so large that it outweighed a 1.3% gain in food prices and a similar increase in housing costs over that two-month period.

Annual food inflation has reached 11.8% in metro Denver, with the cost of food purchased for home consumption up 14.4%. Cereal and baked goods are up 18%, having replaced meat and poultry, up 12.9%, as the fastest-rising category among food items, aside from non-alcoholic beverages, which are up 18.8%.

Housing costs, which weigh heavily on the CPI and are the largest source of spending for most households, are up 8.2% in metro Denver, with rents up 10.4%. Those could continue to exert upward pressure on inflation.

“The latest inflation numbers provide little comfort for hard-pressed consumers as higher prices remain an embedded feature of economic life. This is especially true in essential categories like food, gasoline, and energy where the increases are particularly sharp and continue to drain household income,” said Neil Saunders, managing director of GlobalData, a retail consultant, in comments on the U.S. inflation numbers.

Gasoline prices are also on the rise again after OPEC Plus members agreed to cut oil production targets by 2 million barrels a day, which has resulted in higher oil prices.

Metro Denver was among only five metros out of 23 where inflation numbers are tracked to have seen a decline in prices between July and September, according to an analysis from WalletHub.

Anchorage had the biggest two-month decline in consumer prices at 4%, followed by San Francisco and Detroit down 0.5%. Washington, D.C., matched Denver’s 0.2% decline.

Inflation is running hottest in Atlanta, which was up 1.3% in the two-month period and San Diego and Boston, where prices rose 0.9%.

Based on its annual inflation rate, metro Denver ranks 19th among the 23 metros tracked by the U.S. Bureau of Labor Statistics. Phoenix has the highest inflation rate at 13%, followed by Atlanta at 11.7% and Miami at 10.7%.

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