The Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-Boulder-Greeley, Colo. metropolitan area decreased 0.7 percent from the second half of 2008 to the second half of 2009 the U.S. Bureau of Labor Statistics reported recently. The index was driven down by significant declines in transportation and food and beverages accompanied by a smaller decline in housing.
However, prices in the "West" region of the United States, which includes Colorado, rose in February. Prices in the West rose 0.1 percent since January 2010, and rose 1.4 percent year over year.
Regional price increases in 2010, contrasted with price declines in Denver-Boulder-Greeley found during the second half of 2009, suggest that prices are responding to 2009's fourth quarter increase in GDP of 5.6 percent. However, a lack of job growth will likely continue to put downward pressure on prices.
Denver-Boulder-Greeley prices fall
In Denver-Boulder-Greeley, the transportation index had the largest impact among the eight major expenditure categories, accounting for over one-fourth of the movement in the overall index. Transportation prices declined 3.4 percent from the second half of 2008 to the second half of 2009 due almost entirely to lower motor fuel costs. Prices for motor fuel fell 18.3 percent over the year as a sharp drop in the first half of the period more than offset price increases in the latter half of the year.
The food and beverages index was the second largest contributor to the all items index, decreasing 2.4 percent from the second half of 2008 to the second half of 2009. The decline was attributable to a record-setting drop of 5.4 percent in prices for food at home. In contrast, prices for food away from home rose 1.2 percent and prices for alcoholic beverages were 4.5 percent higher over the year.
The housing component also contributed to the downward movement of the all items index, decreasing 0.7 percent from the second half of 2008 to the second half of 2009. An increase of 0.8 percent in shelter costs was more than offset by decreases in prices for household energy and household furnishings and
operations. Household energy costs declined 10.8 percent as prices for electricity decreased 1.8 percent and utility (piped) gas service costs fell 22.8 percent over the year. Prices for household furnishings and operations were 6.5 percent lower over the period.
The Denver metropolitan area recorded higher prices in the remaining five major expenditure categories. Recreation prices, which include admissions to movies, concerts, and sporting events, advanced 2.7 percent. The index for education and communication rose 2.8 percent and apparel costs were 2.2 percent higher.
Prices for other goods and services, which include tobacco and smoking products and personal care items, increased 2.8 percent and medical care costs rose 0.9 percent since the second half of 2008.
Energy prices, which include prices for motor fuel and household fuels, declined 15.4 percent over the
year, following a 10.6-percent increase in the same period one year ago. The special aggregate index for
all items less energy rose 0.5 percent. Excluding the impact of food and energy prices, the Denver
metropolitan area CPI-U advanced 1.2 percent from the second half of 2008 to the second half of 2009.
The Denver CPI-U stood at 209.652 for the second half of 2009. This means that a market basket of goods and services that cost $100.00 during the 1982-84 base period cost $209.65 during the second half of 2009. Because metropolitan area CPI data are not adjusted for seasonal price variation, consumersand businesses should be cautious in drawing conclusions about long-term retail price trends from short term changes in the area indexes.
The Denver-Boulder-Greeley, Colo., Metropolitan Statistical Area includes Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, and Weld Counties in Colorado.
Prices move up in West
In the U.S. West, prices edged up 0.1 percent in February 2010. During the past 12 months, overall prices advanced 1.4 percent. Prices for transportation decreased 0.2 percent over the month, but rose 11.1 percent over the year. Gasoline prices fell 2.0 percent for the month, but jumped 33.6 percent since February 2009. Prices for new and used motor vehicles edged up 0.2 percent in the past month and advanced 6.2 percent over the past 12 months.
The housing index, which comprises approximately 43 percent of the all items index, was unchanged since January, but fell 1.3 percent for the year. The index for shelter, the largest housing component, was virtually unchanged for the month, but declined 1.9 percent since February 2009. Prices for household fuels and utilities increased 0.5 percent since the previous month and 4.2 percent since a year ago. Household electricity prices were virtually unchanged for the month, yet advanced 4.1 percent for the year. Utility (piped) gas service costs increased 1.1 percent since January 2010, but fell 3.1 percent since February of last year. Prices for household furnishings and operations edged down 0.2 percent for the month and decreased 1.6 percent for the year.