Inflation in the Denver metro area slowed in the first half of 2007, with prices increasing 2.5 percent from the first half of the previous year, based on Consumer Price Index figures released Wednesday.
The latest inflation numbers are lower than the 3.8 percent rise in inflation in the first half of 2006. According to the Bureau of Labor Statistics, a decline in natural-gas costs helped lower inflation, although higher housing costs accounted for nearly one-third of the overall increase.
“We had some of the components going up. But then we had some others that were counteracting that,” said Linda Nickisch, an economist with the bureau in Kansas City, Mo. “The increase was not as great as it was in the previous 12 months.”
The Consumer Price Index data covered the Denver- Boulder-Greeley area.
Specifically, natural gas dropped 12.6 percent in the first half of the year from the first half of 2006. Overall, energy prices for the period were down 0.6 percent.
Shelter costs were up 3 percent, despite the flatlining of home prices in the Denver area.
“What Realtor numbers are experiencing isn’t going to be reflected in what you are seeing here,” Nickisch said.
Nationwide, consumer prices rose 0.1 percent in July, the smallest gain in eight months. The figures, which matched economists’ forecasts, give the Federal Reserve leeway to reduce interest rates if the economy weakens.
“The Fed wants to be convinced that inflation is moderating, and I think that the CPI report does this,” said Ryan Reed, an economist at National City Corp. in Cleveland. “The global economy is well on track, and it seems as though our manufacturing sector is benefiting.”
So far this year, prices are rising at a 4.5 percent annual rate, compared with a 4.7 percent rise in the same period in 2006. Core prices are gaining at a 2.3 percent pace, from 3 percent in the first seven months of last year.
Bloomberg News contributed to this report.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
