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Inflation was bound to become a campaign topic this political season.

During the gubernatorial debate hosted by The Colorado Sun and CBS4 two weeks ago, Republican candidate Heidi Ganahl shared some striking new numbers about how much prices have increased since a Democrat became president.

“Inflation came out (Oct. 13) at 16% since Joe Biden took office here in Colorado,” Ganahl said. “We are number one in the country. That is not a good ranking to have. It’s costing Coloradans an extra $1,000 more a month to live and work and raise a family here, almost $12,000 a year.”

Republican gubernatorial candidate and University of Colorado Regent Heidi Ganahl responds to a question during a debate with Gov. Jared Polis, a Democrat, Thursday, Oct. 13, 2022, in Denver. (Olivia Sun, The Colorado Sun via Report for America)

That same day the official September data for the Denver metro area was released by the U.S. Bureau of Labor Statistics. Inflation came in much lower, up 7.7% from a year ago. 

The discrepancy arises because Ganahl was citing the Joint Economic Committee Republicans State Inflation Tracker, which relied on inflation rates from nine U.S. Census tracts instead of city measures. The report does use the consumer price index, which is the standard measure of how much consumer prices change, i.e. inflation. But JEC added other sources as well. Another difference was that the index measures the change in one year. The Republican committee wanted to look at how prices changed since Biden took office, or since January 2021.

“Unlike BLS, we do not change the baseline month over time because we seek to measure total household inflation costs imposed since the beginning of the high inflationary environment that took effect at the beginning of 2021,” the Republican JEC said of the methodology used in its report.

How JEC Republicans put Colorado on top

The BLS does not track inflation by state so a lot of economists use Denver’s data to figure out Colorado’s economy. The other data JEC used included state-level “personal consumption expenditures” from the Bureau of Economic Analysis, plus consumer spending data from the BLS and U.S. Census’ American Community Survey.  

Those are credible sources and JEC uses “sound methodology, and their calculations are correct,” said Gary Horvath, a Denver-area economist with cbre.com. But every voter should be aware of how data is presented.

“The data often tells a different story based on the starting and ending points,” Horvath said in an email. “Data is not partisan; however, it will be used to support partisan viewpoints on both sides. For example, in 2022, the Republicans will talk about how Colorado has the highest inflation in the nation. At some point in the future, the Dems will talk about how Colorado made a spectacular recovery from record-high inflation.”

BLS just doesn’t track individual state inflation rates. “We don’t have the budget for it,” a BLS economist said. So the JEC had to do extra research to figure out inflation rates for every state. The result put Colorado ahead of most other states, though in an eight-way tie for highest inflation rate in the U.S.

That 16% rate was based on index data. But JEC picked the data point that split up the nation into nine Census divisions, including the eight-state Mountain division, made up of Colorado, Arizona, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming.

That resulted in all eight states having the same inflation rate in September. They also shared the same 15.6% cumulative rate in August.

A story in the Salt Lake Tribune in August criticized the JEC report after columnist Andy Larsen discovered it came from just the Republican side of the joint committee. But when he learned Utah’s inflation rate is based on the broader eight-state division, he called the report useless. “(T)hey just take the regional inflation numbers reported by the Bureau of Labor Statistics and multiply them by average household spending in each state. Boo. They get a solid 2 out of 10 for usefulness there,” he wrote.

And that’s exactly what JEC did. By taking how much the average Colorado household spent in 2019 and 2020 and using it to project spending in January 2021, they estimated Coloradans spent $6,092 a month, the ninth highest in the nation. Then they multiplied that by the 16% inflation rate. Colorado came in second to Washington, D.C., on how much more a household spent in September due to inflation — an extra $978, compared to January 2021. 

Whether the average Colorado household is really spending $1,000 more per month than in January 2021 is unknown. The statistic cited by Ganahl is an estimate. 

“This approach allows for there to be state level variation in the spending estimates, even though there is not variation in the inflation rates by division,” according to a statement from an economist with the Republican side of JEC. 

What official data says about Colorado

Every household deals with inflation differently, said Phyllis Resnick, lead economist and executive director at the Colorado Futures Center at Colorado State University. Meat may cost more these days so some households go without while others may not even notice. If you ask them about inflation, they’ll tell you two different things.

“What we do in order to deal with the fact that we can’t possibly have a measure that addresses everyone’s unique circumstance is that we agree on a standard measure so we have consistency,” Resnick said. “And the most popular standard measure (of inflation) is the consumer price index.”

The latest index has the Denver-Aurora-Lakewood metro area at a 7.7% inflation rate for September, down from a high of 9.1% in March. Denver’s rate has mostly been lower than the nation’s rate since January 2021, rising higher this year in January and March. It’s back below the national average, which was 8.2% in September. Before the pandemic, the Denver-area’s annual price increases were less than 4%. 

But the index tends to focus on the change within the past 12 months. In a Colorado Sun analysis of the consumer price index, we looked at the cumulative inflation rate for the Denver metro area for 21 months starting in January 2021, when Biden took office.

Since the index report doesn’t track individual state inflation, we compared the 23 metropolitan areas tracked by the BLS. As of September, Colorado ranked in the middle at No. 13, which is in the lower half for the 21 months. 

Phoenix topped the list at 18.19% since January 2021, followed by the southern metro areas of Atlanta, Tampa, Dallas and Miami filling the top five spots.

Denver’s inflation rate, at 13.25% since January 2021, was still higher than the U.S. average, at 13.18%. It’s also higher than Los Angeles, New York and the Washington, D.C. area, which ranked at the top of the JEC report for how much more residents must pay each month due to inflated prices.

Denver’s prices also fell in September, from July, because gasoline prices dropped. That meant the 21-month cumulative rate also fell slightly to 13.25%, from 13.44% in July.

Based on the consumer price index measure of inflation, Denver’s wasn’t the highest or lowest in the past 21 months — or anytime during the past 21 months. And whether the average Coloradan spends $1,000 more per month today than they did in early 2021 is up for debate since it’s not officially tracked. Either way, consumer goods cost more than they did in early 2021. 

JEC Republicans didn’t use the metro data because several states are excluded, said Sydney Thomas, communications director for the JEC Minority Staff.

“We wanted to generate a product that would provide state level estimates for all states using a consistent and defensible methodology,” Thomas said.

Ganahl’s campaign did not respond to a request for comment.

Any sort of measurement — including official ones — that ranks items that are really quite close together peeves Resnick, the CSU economist who had not read the JEC Republican report. 

“You can take issue with the standard measure, which economists do all the time because other measures give you a different glimpse of the economy. That’s why I call economic analysis a mosaic. There’s not one thing you can point to,” Resnick said. “But when you do something like this in an obviously politically heated time, it’s just confusing for people. And at the end of the day, that’s not the correct number either, because every single household feels inflation in a way that’s unique to their mix of goods.” 

Tamara Chuang

Tamara writes about businesses, technology and the local economy for The Colorado Sun. She also writes the "What's Working" column, available as a free newsletter at coloradosun.com/getww....