Metro Denver consumer inflation rate drops to 2.6% in May

Grocery store prices are down over the past year, but the cost of eating out continues to rise sharply. The latest CPI report found metro Denver prices for eating out are up 6.2%, while the cost of a basket of items urchased at a grocery store are down 1.6%. (Photo by Helen H. Richardson/The Denver Post)

Groceries and gasoline in metro Denver are slightly cheaper in May compared to a year earlier, but eating out has become more expensive and rising housing costs are keeping inflation above the target the Federal Reserve wants to see, according to the latest Consumer Price Index from the U.S. Bureau of Labor Statistics.

Prices rose 2.6% year-over-year in May in the Consumer Price Index for Denver-Aurora-Lakewood. That is below the annual increase of 3.3% measured nationally and down from the 5.1% annual rate seen in May 2023.

Across April and May, consumer prices rose 0.6% in metro Denver matching the rate seen nationally.

Rents are up 3.1% year-over-year and an equivalent for homeowners is up 4.6% in metro Denver. Fuels and utilities for homes rose 6.6% over the past year, while nationally they rose 4.6%.

Gasoline prices, by contrast, are down 3% over the past year in metro Denver. But that is about to change, said Cole Anderson, a research analyst with the Common Sense Institute, in a note on the inflation numbers.

Northern Front Range stations are required to provide reformulated gasoline to combat high ozone levels and that will add $90 to $260 in fuel costs in June and July for households with two drivers, depending on the type of vehicle they drive, Anderson estimates.

The cost of purchasing a used car is down 9.5% over the past year while new car prices are flat compared to May 2023. Apparel prices are down 2.3%, while tuition costs are up 4.5%.

Food prices are moving in opposite directions, with the cost of food eaten at home down 1.6%, while the cost of food eaten away from home, at restaurants, up 6.2% over the past year.

Among the items purchased at a store, the biggest declines were in cereals and baked goods, down 3.8% and dairy products, down 3.7%. The cost of alcoholic beverages was up 3.3%.