What’s Working: Denver-area inflation slows again to 1.4% in past 12 months 

Tamara Chuang

Business/Technology Reporter

Prices on items like meat, clothing and gasoline in the Denver area increased 1.4% in September, rising at the slowest annual rate since early 2021. Lower hotel prices also helped regional inflation fall since July, according to the Consumer Price Index.

The region’s increase in consumer prices was one of the lowest nationwide — Tampa’s rate was 1.2% — and lower than the national inflation rate of 2.4%.

Area annual inflation has fallen steadily in the past two-and-a-half years after peaking at 9.1% in March 2022. But even as CPI has shown that price growth is getting back to where it was before the pandemic, it’s difficult to not recall the breathless increases of years past. Even the conservative economic think tank Common Sense Institute wasn’t ready to say whether the economy is now headed in a good direction.

“Price growth slowing in Colorado is a welcome sign, but bottom line is that relative to incomes, prices remain much higher than they have been for the last two decades,” Kelly Caufield, CSI’s executive director, said in an email.

Her Greenwood Village team of economists calculated the added cost Coloradans are paying today compared with their pre-pandemic pocketbooks and came up with an extra $1,335 a month of pure inflation to buy the same goods and services they did more than four years ago.

If that seems high it probably is since consumers typically change their spending when faced with higher costs. They eat out less, add a roommate or opt for chicken instead of beef. At $1,335 per month, that’s 21% of the average Colorado worker’s pay of $37.80 an hour, according to the state Department of Labor and Employment’s August jobs report. It’s also nearly the same as a median-price one-bedroom apartment in Denver, according to ApartmentList’s October data.

“According to CSI’s Inflation Misery Index just released, the average household in Colorado must spend $26,000 more per year to consume at 2019 levels,” Caufield added. “And while price growth has slowed in recent months relative to the national average, the Denver metro still ranks 13th of 26 metropolitan regions tracked by the BLS.”

Broomfield economist Gary Horvath agreed that consumers don’t easily recover after they’ve been hit with ongoing higher prices, even if the peak was 30 months ago.

“Both year-over-year rates are lower than U.S. rates; however, consumers are feeling the cumulative rate of inflation, or the base effect,” he said.

And he isn’t convinced that Denver leads the nation with some of the lowest annual inflation “because the data is so volatile.”

Inflation four years later

But he dug deeper to figure out what’s really going on. Housing costs for consumers have the biggest impact on their budgets. That’s also true with CPI, which estimates housing costs as 45% of a consumer’s monthly spending. In the Denver region, those went up 1.4% from a year ago, just like overall inflation.

These days, housing prices and rents aren’t growing as fast as they were in recent years. But take those high-growth years into consideration and the cost of housing over four years has increased 19.9%.

More one-year and four-year price changes for the Denver area, as of September:

• Services, like phone and internet service, are up 2.3% in September, and up 20.4% since 2020
• Transportation costs are up 1.4% in a year but up 33.7% since 2020
• Durables , or infrequent purchases like a computer, are down 2% since last year but up 11.5% since 2020
• Energy costs are down 8.7% in the past year but up 41.6% since 2020
• Food away from home, up 5.8% in a year, but up 28.9% since 2020
• Overall Denver CPI is up 20.3% since September 2020

“While the year-over-year rates and the four-year rates are important, inflation will have a different impact on people in different geographies, occupations and wage categories,” Horvath said. “The Dallas Federal Reserve shows it disproportionately affects lower income workers. It may affect consumers in rural areas who have less access to goods and services. The good news is it is getting better.”

➔ Also up: Colorado’s average pay is up 22.8% in four years. Since August 2020, the state’s average hourly pay increased to $37.80 from $30.79, according to the BLS Current Employment Statistics survey.

How to forget about inflation: Readers share

Glancing at this week’s grocery ads, I noticed a half-gallon of milk at King Soopers was on sale (via coupon) for $1.29. That seems incredibly cheap. From my hazy memory, that’s about a 30% increase from when it was on sale a decade ago, when it was even more ridiculously cheap.

There’s obviously more at play here than pure inflation, but I, like many What’s Working readers, am eating out less while drooling over food photos online, nearly exclusively thrift shopping and investing in museum memberships to keep the family entertained all year. While some habits have been years in the making, it’s so very hard to forget when my favorite dish at a local sushi restaurant was 42% less, but I’m comparing the price to what it was more than a decade ago.

Last week’s What’s Working poll asked readers about what would help them forget about the high inflation of recent years? I also offered some suggestions to help the interactions.

What would help you forget? The top response was a 62% pay raise, which is what the Gulf Coast unionized dockworkers agreed to before ending their three-day strike last week. That 62% raise would occur over six years and boost International Longshoremen’s Association worker pay to $63, from $39 an hour, the Wall Street Journal reported.

A close second was house payments that are the same as renting. That was the case not too long ago, even in Denver. In 2016, Denverite reported the city’s median price house of $345,383, which made a monthly mortgage cheaper than renting as long as the new homeowner could plunk down a 20% down payment. However, this hasn’t been the case since at least 2019, according to The Denver Post.

In third place, small business owners hope for a business that is not just growing but is profitable.

And landing surprisingly in fourth: amnesia.

Thanks to the anonymous retired couple who shared more details. They refinanced during COVID to get a lower mortgage payment, but then other house-related expenses grew. “Our home insurance went up twice in four years and our property tax jumped. So four years later we are paying more per month in mortgage payments than we did when we refinanced four years ago. It’s a difference of over $600 per month.”

Here’s what else it’ll take for some readers to forget high inflation, according to poll responses:

• “Housing costs actually drop!”
• “Just a 10% raise”
• “Each recession has caused me to hone in on my values about where I spend my time and money. Less money forced me to make hard decisions, and ultimately frugality always won out.”
• “Frugality, thoughtfulness about purchases, taking good care of what we have, repurposing, reusing, DIY projects, etc. Makes a huge difference.” 
• “Prices staying the same or going down and honestly that’s happening more and more often.”
• “It really wasn’t that bad. I just bought what was on sale.”
• “Already have!”

Sun economy stories you may have missed

➔ A Colorado ski town found an answer to its affordable housing crisis. Then voters shut it down. >> Read story

➔ Group puts up fence, claims ownership over 1,400 acres of Colorado forest, sparking outrage. The Free Land Holder Committee says historic treaties and deeds give it ownership of the land in the San Juan National Forest north of Mancos >> Read story

➔ Denver’s 16th Street Mall aims to finish construction by summer 2025. The city’s biggest promoter of downtown shares the achievements but also remaining challenges to get downtown Denver back to full operations >> Read story

➔ Denver’s 7A: What you need to know about RTD’s request to keep all its sales tax revenue. The ballot question in RTD’s metro Denver service area asks taxpayers to approve a “de-Brucing” to allow the transportation agency to keep all of its sales tax revenue in the coming years >> Read story

➔ Albertsons brand would no longer exist in Colorado after merger with Kroger. Most Albertsons-owned stores, branded as Safeway, will be sold to C&S while King Soopers parent Kroger picks up just 14. Week two in Colorado antitrust trial begins. >> Read story

➔ Proposition KK: What voters should know about Colorado’s proposed excise tax on guns, ammunition. Referred to the ballot by the state legislature, Colorado’s Proposition KK would impose a new 6.5% excise tax on guns and ammunition to fund support services for crime victims and other programs >> Read story

Other working bits

➔ United Airlines has added 500 employees in Denver and Colorado Springs. The airline has been constantly hiring for years as part of a massive expansion at its hub at Denver International Airport. So far, it’s hired 500 for Denver and Colorado Springs and has a hiring goal of 800 in 2024. Nationwide, United’s added 7,000 people this year, including pilots and flight attendants. Company officials said United still has challenges finding talent, so it’s added programs like Calibrate and Technician Pathway Program to encourage students, Army reservists and others interested in careers or apprenticeships in aircraft, ground service equipment and facilities maintenance. >> United’s still hiring

➔ Louisiana-based WMD Squared expanding to Colorado Springs. The engineering firm, which has contracts with the U.S. Coast Guard and Navy, plans to quadruple its workforce as it moves to the Catalyst Campus in downtown Colorado Springs. It was approved for state tax credits, which kick in only after they hire up to 42 new employees at an average annual salary of $79,286. The company currently employs 12 in Lafayette, Louisiana. “Being close to the mountains, and the defense and aerospace industry will be a game-changer for us,” said WMD co-founder Willem Mast in a news release. >> Details

➔ Vail taking applications for house lottery. The chance to purchase a 3-bedroom townhouse for $604,882 or a 2-bedroom condo for $314,963 are part of a community lottery to be held on Halloween. As part of the city’s affordable housing efforts, the homes have annual appreciation caps (1.5% and 3%, respectively). Locals only. >> More details

➔ Ball Corp. subsidiary in Georgia settles race-based hiring discrimination suit. Ball Container, a subsidiary of the Westminster federal contractor known for making aluminum beverage containers, agreed to settle a case involving 192 Black applicants for a technician job. The Office of Federal Contract Compliance Programs in the U.S. Department of Labor found Ball Container was not in compliance with federal regulations and had “statistically significant differences in the hiring rates of Black applicants for Production Technician positions when compared to White applicants” between Feb. 1, 2020, and Jan. 31, 2021. Ball Container agreed to pay $309,000 in back wages and interest, provide job offers to eligible class members as positions became available and provide training to those involved in hiring. Ball Corp., according to the labor department, has received more than $1.1 billion in federal contracts. >> Read resolution

Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww

Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara

Miss a column? Catch up:

• Colorado’s misery index shows we are less miserable, though it may not feel like it
• Cooling Colorado Springs’ job economy’s top concern? Housing affordability
• Cities like Denver want AI to handle boring, tedious tasks
• Techstars Denver spotlights tech startups tackling workforce issues
• Colorado homeowners insurance increased nearly 60% in five years
• How a Colorado program is linking quantum, space and tech companies to a future workforce
• Colorado incentives are helping rural firms transition to employee ownership
• This guy wants to get rid of endless phone loops, junk fees and other consumer irritants

What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.

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