Inflation in Colorado – May 2023 Update
Author: Cole Anderson
Bi-Monthly Inflation Slows
Prices in Colorado increased by 0.81% during April and May, down from a 1.34% increase over the two months prior. Aided by slower increase, Colorado’s 12-month inflation rate dropped from 5.7% to 5.15%. The primary causes of this change were a decrease in the price of energy which includes oil and gas, and slower rates of growth of prices of medical care and transportation. The energy sector saw a 6% price decrease over the last 12 months, the largest drop of any sector. This comes on the heels of enormous energy price growth which saw the sector’s prices increase 34% May ’20 to May ’21, and 25% May ’21 to May ’22.
- In April and May, the average Colorado household spent $2,160 more due to inflation—an average of $1,080 per month. The average Colorado household has spent $16,960 more since 2020 because of inflation.[i]
- Metro Denver inflation has outpaced the national average over the last 12 months – 5.2% in Denver compared to 4.1% nationally.
- After increasing 35% May ’20 and another 25% May ’21 to May ‘22, the energy sector saw its prices fall 6% over the last 12 months, the largest decrease of any sector tracked over that period.
In April and May, the average Colorado household spent $2,160 more due to inflation—an average of $1,080 per month. The Federal Reserve increased the fed funds rate by 50 basis-points in December and 25 basis-points in February, though experts now say the Fed may now be “pausing” these raises to assess inflationary levels.
Inflation in Metro Denver over the last 12 months was 5.2%—1.1 Percentage Points above the National Average (BLS CPI Survey)[ii]
- Of the 23 urban consumer price indices tracked by the BLS, Denver–Aurora–Lakewood’s ranks 10th in total growth since the end of 2020.
- Average annual inflation between 2010 and 2020 was 2.51%. Since May 2022, 7 of the categories shown on page 4 have grown more than that, while 6 have grown less.
- The two price categories that grew the fastest over the last 12 months were fuel and recreation, which grew by 9.06% and 8.10%, respectively.
Price Changes in Metro Denver over the Previous Year
[i] 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.