Inflation in Colorado – July 2023 Update
Authors: Cole Anderson & Erik Gamm
Bi-Monthly Inflation Slows
Prices in Colorado increased by 0.65% during June and July, down from a 0.81% increase over the two months prior. Aided by this slower increase, Colorado’s 12-month inflation rate dropped from 5.15% to 4.72%. The primary cause of this change was a significant decrease in the price of energy, including oil and gas, which saw its price level decrease by 6.5% since last July. Despite this strong decrease in energy prices, household fuel and utility prices grew by a whopping 16.45% over the last year. This inverted relation between energy and household fuel and utility prices can largely be attributed to a lag between wholesale energy prices and what consumers pay in their monthly utility bill.[i] In addition, decreasing inflation does not directly correlate to decreasing prices.
- In June and July, the average Colorado household spent $2,336 more due to inflation—an average of $1,167 per month. The average Colorado household has spent $19,295 more since 2020 because of inflation.[ii]
- Metro Denver inflation has dramatically outpaced the national average over the last 12 months – 4.7% in Denver compared to 3.3% nationally.
- According to U.S Census data, Colorado restaurant prices are up 24% between Nov. ‘22 and June ‘23, the largest increase in the nation over this time.[iii]
- From May ‘23 to July ‘23, household fuels and utility prices grew by 7.5% in the Denver MSA, the largest two-month price jump since Jan ‘22 to March ‘22.
In June and July, the average Colorado household spent $2,336 more due to inflation—an average of $1,167 per month. Except once in June, the Federal Reserve has raised interest rates to combat high inflation each time it’s met since March 2022.
Inflation in metro Denver over the last 12 months was 4.7%—1.4 percentage points above the national average (BLS CPI Survey)[iv]
- Of the 23 urban consumer price indices tracked by the BLS, Denver–Aurora–Lakewood’s ranks 7th in total growth since the end of 2020.
- Average annual inflation between 2010 and 2020 was 2.51%. Since July 2022, 6 of the categories shown on page 4 have grown by more than that and 7 have grown by less.
- The two price categories that grew the fastest over the last 12 months were fuel and services, which grew by 16.45% and 8.02%, respectively.
Price Changes in Metro Denver over the Previous Year
[ii] Impacts on household spending are generated by distributing the consumer expenditure estimates from https://www.bls.gov/regions/mountain-plains/news-release/consumerexpenditures_denver.htm across individual months, weighting them according to their corresponding CPI levels, and adjusting them according to the latter’s growth history.