Denver area residents continue to pay a premium when it comes to inflation

Inflation in metro Denver continues to run much hotter than the rest of the country, with energy prices a significant contributor to a stubborn gap that is denying area consumers the reprieve seen in other parts of the country.

The Consumer Price Index for All Urban Consumers in Denver-Aurora-Lakewood rose at a 5.4% annual pace, ahead of the U.S. city average rate of 3.7%, according to September CPI numbers the U.S. Bureau of Labor Statistics released on Thursday.

As was the case this summer, metro Denver continues to report some of the highest price increases in the country outside of Florida, where annual inflation is running at 7.8% in Miami and 6.7% in Tampa, according to the most recent CPI reports for those metro areas. Detroit is also higher at 5.9% and Seattle is tied with Denver at 5.4%.

Energy is one area where metro Denver prices are diverging the most for reasons that aren’t entirely clear. Energy services, which include home electricity and natural gas costs, are up 12.9% in metro Denver the past year but down 3.3% nationally.

Of those two subcategories, electricity prices are down 3% in metro Denver, suggesting that natural gas costs, which aren’t disclosed locally in the bi-monthly report, are to blame. Nationally, electricity prices are up 2.6% while natural gas prices are down nearly 20%.

Gasoline prices are also providing Denver area residents with a harsher reality. Those are up 7.2% in metro Denver the past year, more than double the 3% increase seen nationally. Some of that goes back to the closure this winter of Commerce City’s Suncor Refinery, a major supplier in the region after cold temperatures damaged its equipment. That forced more gasoline to be shipped in at a higher cost.

But looking at the increase between July and September, gasoline prices in Denver are up 2.2% compared to a 0.7% gain nationally.

When it comes to food, Denver and the U.S. are fairly close in terms of annual inflation at 3.9% and 3.7%, and Denver is doing better in terms of grocery prices, with the cost of food eaten at home up 1.4% here versus 2.4% nationally.

Grocery store price increases over the past year are the largest for fruits and vegetables in Denver at 4%, but in general, price increases for most food categories are moderating.

Yet, when it comes to eating out, Denver food prices are up 7.8% versus. 6% for the rest of the country. A separate measure from the U.S. Census Bureau puts restaurant inflation at 24% between November of last year and June of this year in Denver, the highest rate seen in the country, said Cole Anderson, a research analyst with the Common Sense Institute in Denver.

Anderson said besides rising food prices, restaurants are coping with higher labor costs and increased fuel costs, which make it more expensive to distribute food. Some of the recent increases could also reflect restauranteurs trying to recoup some of the costs they absorbed earlier.