Gas and electricity increases are cited for the jump from the first half of 2009
POSTED: 01:30 a.m. HST, Sep 08, 2010
Honolulu's inflation rate accelerated during the first six months of this year, fueled in large part by rising gasoline prices and electricity rates, according to a recent government report.
The city's Consumer Price Index rose by 2.5 percent from the first half of 2009, the Bureau of Labor Statistics reported. That compares with all of 2009, when inflation rose by a scant 0.5 percent.
The Honolulu inflation rate for January through June also outpaced the 2.1 percent national average for the same period.
"We went into the recession running a little hotter than the rest of the nation in terms of inflation," said Paul Brewbaker, principal of TZ Economics. "Coming out of the recession, we're still above the national average."
Gasoline prices, which are included in the transportation category, shot up 35 percent, compared with the first half of 2009.
Electricity prices, which are counted as part of housing costs, rose 24.8 percent. Overall housing costs, however, rose by just 0.9 percent as a decline in home prices helped offset higher electricity bills.
In other major categories, food and beverage prices rose by 0.1 percent, while apparel rose 1.9 percent. The price of medical care fell 0.3 percent.
Hawaii's inflation rate for the first half of 2010 was up just 0.8 percent from the second half of 2009, the BLS reported. Nationally, the rate was 0.7 percent for the same periods.
The state Department of Business, Economic Development and Tourism is forecasting consumer prices to stabilize at 2.2 percent in 2010 and 2011, reflecting a slow recovery from the recent economic downturn. The forecast calls for inflation to inch up to 2.3 percent in 2012 and 2013.
Hawaii's economic recovery appears to be building momentum faster than the nation as a whole, Brewbaker said.
"The rebound in housing happened a little bit earlier. Tourism took a little longer after being hit by the financial crisis, but by 2010 the visitor count was relatively stable," Brewbaker said.
"Now a breakout is unfolding. The jobs numbers are getting better, and generally speaking I say we're good to go."