Inflation news mixed in Honolulu


POSTED: Saturday, August 15, 2009

Honolulu's inflation rate had its smallest increase in a decade during the first six months of 2009, but prices in most categories were still rising, the federal government said.

Overall inflation rose 0.3 percent from the first six months of 2008, the Bureau of Labor Statistics reported yesterday.

Aside from an 11 percent reduction in year-over-year transportation costs, Honolulu consumers paid higher prices in every other category tracked by the bureau. The results were in contrast to the United States as a whole, which saw a 2.1 decrease in the year-over-year cost of living, the largest drop since 1950.

“;This is the first time since 1998 that we've seen Honolulu's inflation fall below 1 percent,”; said Carl Bonham, executive director of the University of Hawaii Economic Research Organization.

Honolulu's continued increase in shelter costs, which rose 2.7 percent from a year ago, is one reason its year-over-year CPI has not turned negative, Bonham said.

Shelter costs, which refer to the rental value of a home, comprise about 20 percent of Honolulu's CPI, he said.

“;The housing market for the U.S. is much worse than the housing market for Honolulu,”; Bonham said. “;Our home prices and rents have not fallen nearly as much.”;

While Honolulu's economy has continued to weaken, energy prices have fallen and demand for all goods and services has dropped, it takes time for price pressure to diminish, Bonham said.

“;The good news is that prices didn't go up that much, although some people may feel like they did because their income is down and their bills are up,”; Bonham said.

Although prices increased from the first half of 2008, the overall CPI for Honolulu in the first half of 2009 was actually down 1 percent from the last six months of 2008, the BLS report said.

While grocery prices, which rose 5.9 percent over the past year in Honolulu, contributed to the 0.3 percent overall increase in inflation, Honolulu grocery stores say that they are trying to hold costs.

“;At Foodland we are doing everything we can to help customers reduce their food costs during this challenging economic time,”; said Sheryl Toda, the Honolulu-based director of corporate communications for the supermarket chain.

Foodland offers savings on more than 11,000 discounted items each week, and customers can find additional savings in the stores' weekly ads and more than $100 worth of coupons on Foodland.com, Toda said.

Curtis and Kawehi Helm, who were stocking up on discounted pizza yesterday at the Beretania Street Foodland, say they hold inflation at bay by shopping close to home to save on gas and bringing their own shopping bags for a nickel credit.

“;Prices are always getting higher so every little bit helps,”; Curtis Helm said.

Times Supermarkets is working with suppliers to lower prices and pass the savings on to patrons, said Randy Slentz, Times' senior director of marketing and merchandising.

“;We've tried to negotiate new long-term contracts, and as a result we have lower prices on our milk and orange juice,”; Slentz said.

To put Honolulu's inflation in perspective, a basket of goods and services that cost $100 in 1982-84 would have cost $228.07 in the first six months of 2009, the bureau said.





        Inflation in the first six months of 2009:


  Pct. change
                from first
                half of '08
Pct. change
                from second
                half of '08
Medical+1.5 %+1.1%