Friday, April 15, 2011

Consumer prices in West region up 2.6 percent

The Consumer Price Index for All Urban Consumers (CPI-U) for the Western United States increased 2.6 percent from March 2010 to March 2011, the U.S. Bureau of Labor Statistics reported on April 15.

The regional CPI is reported monthly, while the Denver-Boulder-Greeley CPI is released twice per year.

Year-over-year, the largest increases were found in transportation, which increased 9.1 percent, and in food and beverages, which increased 2.8 percent. The West region CPI increased 0.9 percent from February 2011 to March 2011, which is the largest monthly increase in 34 months.



Deflationary pressures continue in the market place in the face of stagnant wages and limited job growth, but increases in consumer prices have been consistent in recent months as commodity prices continued to affect gasoline prices at the pump, and food prices.



Increases in commodity prices often indicate future increases in consumer prices. According to the most recent producer price index data, the index for all commodities increased 8.6 percent from March 2010 to March 2011. Month-over-month, commodity prices increased 1.8 percent, which is the second-largest monthly increase in 22 months.

Although CPI changes do not yet match those seen from 2005 to 2008, income growth was much stronger in that period which in turn diminished the effects of rising prices. Continued increases in consumer prices will likely lead to downward pressure on disposable income for households throughout the region.

The most recent CPI numbers specific to the Denver-Boulder-Greeley area can be found here.