Honolulu’s inflation rate in the second half of 2011 rose at the fastest clip in four years, led by sharp increases in electricity and gasoline prices, according to a report released Friday.
Inflation, as measured by the Consumer Price Index, rose by 4 percent in the last six months of 2011 compared with the same period a year earlier, the Bureau of Labor Statistics reported.
The increase in the index was the largest since the second half of 2007, when it rose by 4.8 percent. Honolulu’s increase also trumped the national average increase of 2.4 percent in the second half of 2011.
For Honolulu consumers the biggest increase was in electricity costs, which rose 34.3 percent during the period. Gasoline prices rose 19 percent.
Both of those increases came as no surprise to many Honolulu residents, who have watched prices at the pump and on their electric bill climb steadily over the past year. Electricity rates on Oahu hit a record 35.1 cents a kilowatt-hour in December, while gasoline prices reached $3.91 a gallon, up from $3.47 in December 2010.
Kaneohe resident Jim Wolery said his electricity bill continued to climb even after taking steps in his household to curb energy use, including putting a timer on his water heater, encouraging family members to turn off lights and not letting the clothes dryer run longer than necessary.
"It’s just one thing piled on top of another. Between the electricity and filling up at the gas station, we’re paying an extra $100 a month. And food’s going up, too," said Wolery, 65.
The spike in gasoline prices pushed overall transportation costs up 7 percent, the BLS reported. The category with the next largest increase was food and beverage, which rose by 4.4 percent. Other increases included housing, 4 percent; medical care, 2.3 percent; education, 2.3 percent; and recreation, 1.9 percent.
The increase in Honolulu’s inflation in 2011 topped expectations, said Carl Bonham, executive director of the University of Hawaii Economic Research Organization. The average increase for the full year was 3.7 percent, higher than the 3.5 percent hike forecast by UHERO.
"Of course a big chunk of that was energy. If you exclude food and energy, the increase was closer to 2 percent for the full year," Bonham said.
Rising food and energy costs have been difficult to cope with for Wanetta Vierra and her husband, retired federal workers living in Makakilo. The two live mainly off their Social Security checks, which have been frozen over the past two years, she said.
"We stopped running the air conditioning, put insulation and a timer on our water heater and stopped driving one of our cars," said Vierra, 69. "We even turned down our automatic (lawn) sprinklers to almost nothing. We’re trying to keep our home looking nice, but the costs keep going up. I get frustrated," she said.
Vierra, a lifelong Hawaii resident, wants her daughter to move back to Hawaii from Utah with her family, but the high cost of living is part of what’s keeping her from doing it. "She came for a visit a few weeks ago, but with the price of everything so high, she says she can’t live here."
Beth Greenhill of Honolulu said her family has adjusted its lifestyle to cope with rising prices.
"As the bill payer in my house, I notice electricity and grocery prices escalating the fastest," said Greenhill. "That is a staggering increase in HECO’s rate compared with the rate of inflation, and, yes, I definitely feel it in my pocketbook," she said.
"As it is, I take the bus to work, drive a Mini Cooper and carpool. We’re doing all the right things, but it still feels like backsliding. We just keep cutting out what we can, where we can, and not going on vacations we would have wanted to take, but I feel for those that have nothing else to cut."
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