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Inflation rate rises to 4.1% in metro area

Minimum wage not affected by second-half figure

Published February 20, 2009 at 11:26 a.m.
Updated February 20, 2009 at 11:57 p.m.

Denver-area inflation was 4.1 percent in the second half of 2008, the Bureau of Labor Statistics reported Friday.

The bureau releases a consumer price index for the Denver area twice a year. Friday's number is a measure of rising prices from the second half of 2007 to the second half of 2008.

The bureau's Denver-metro figure has taken on new importance since voters placed a Colorado minimum wage in the state constitution in 2006. The state's minimum wage increases each year based on the metro Denver consumer price index. However, the figure released Friday is not used in the calculation. The rise of prices in the first half of the year is used, instead.

The Denver-area inflation rate for the first half of 2008 was 3.7 percent, which caused the $7.02 minimum wage to increase to $7.28 on Jan. 1.

Nearly a third of the increase in Friday's number was attributable to a 3.2 percent increase in costs for "housing," which include household energy costs.

The shelter index, which measures what people traditionally think of as housing costs, rose 1.8 percent over the period.

Prices for household energy, however, jumped 22.5 percent from the second half of 2007 after declining 20.6 percent from the second half of 2005 to the second half of 2007.

Other elements of the increase:

* The food and beverages index had the second-largest effect, with costs rising 5.4 percent over the period. That was the largest over-the-year increase since 1990, the Bureau of Labor Statistics said. Prices for food at home, as opposed to food in restaurants, climbed 6.6 percent and accounted for nearly two-thirds of the increase in the food and beverages index.

* Transportation costs increased 4.0 percent, following an increase of 4.8 percent in the same period one year ago. Prices for motor fuel were 3.6 percent higher, with price declines during the second half of the year partially offsetting increases earlier in the year.

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