Honolulu prices flat It costs more to eat out in Honolulu than it did a year ago, but less to get to the restaurant, according to federal consumer price figures issued today.
The cost of living in Honolulu
is up slightly from a year ago,
according to federal dataBy Russ Lynch
rlynch@starbulletin.comOn the whole, the cost of living in Honolulu is up slightly from a year ago, no surprise to local economists.
Overall Honolulu consumer prices rose 1.1 percent in the first half of this year, compared with the first half of 2001, according to the half-yearly consumer price index from the Bureau of Labor Statistics.
The federal numbers are very close to predictions by local economists, said Leroy Laney, a professor of economics at Hawaii Pacific University.
"Inflation continues not to be a big problem here or nationally," Laney said. "All of the inflation numbers we have been getting lately at the national level have been no problem. That's why the Fed is not concerned, is not tightening monetary policy."
Laney said a consensus among local economists was for a 1 percent increase.
A big factor in keeping prices from rising was a drop in oil prices, which brought gasoline costs down 16.2 percent and, in turn, pulled private transportation costs down 4.8 percent.
The cost of eating restaurant food, however, rose 3 percent and alcoholic beverage prices were up 5.7 percent. The overall food and beverages price average was up 2.4 percent from a year earlier.
Honolulu's squeeze in the rental market for houses and apartments showed up as the major contributor to a 1 percent rise in Oahu housing costs in the first half of this year.
The lower oil prices brought household gas and electricity costs well below last year's, down 7.9 percent, and that helped limit the rise in housing costs, countering the 2 percent increase in rents.
The state Department of Business, Economic Development and Tourism expects a sharper rise through the rest of the year, for a 1.3 percent overall yearly price increase, said Pearl Imada Iboshi, state economist.
Like Laney, she said the latest figures were not surprising, but noted there were some increases in individual categories. Apparel prices rose 6.5 percent. Education and communication costs were up 3.3 percent.
"The only factor that was pulling the CPI down was energy," Iboshi said.
Also not surprised at the numbers was Paul Brewbaker, senior vice president and chief economist at Bank of Hawaii.
"That's exactly what our forecast was," he said, adding that it amounts to zero inflation because there is a built-in upward bias in the way the government puts together the figures.
He said housing prices are already on the way up and are likely to move higher through the rest of the year, but that Honolulu inflation has been flat for four or five years.
And Brewbaker thinks that should become a more significant factor in local wage negotiations than it has been.
There are some major management-union wage contract talks going on, including Waikiki hotel employees and Honolulu dockworkers.
"The negotiating parties need to get focused on these kinds of numbers," he said.
One item that played a big part in Honolulu consumer prices over the years, the cost of medical care, is missing this time, as it was in the last report six months ago.
"We just do not have enough information to publish," said Todd Johnson, an economist in the Bureau of Labor Statistics regional office in San Francisco. He said the bureau is taking steps to see if it can get enough data to resume publishing that item soon.
There is evidence that medical costs are rising. Last year, the Hawaii Medical Services Association raised its rates for community-rated groups by an average of 9 percent. In 2000, the rate increase averaged 8.5 percent.
On July 1, HMSA hiked rates for many of its plans an average of 5.6 percent.
Kaiser Permanente raised insurance premiums for its small business customers by an average of 8.7 percent on Jan. 1, affecting about 57,000 Kaiser members.