Just as gas prices seemed to be easing, economic data out Wednesday reminds us of what happened last month: Stuff cost more in metro Denver in May as inflation ticked up to 5% from a year ago.
The region’s annual consumer price index hasn’t been that high since September 2023, when consumer price growth was slowing from the decades-high 9.1% in spring 2022.
The Denver region’s biggest price increases were for energy costs, which have risen 15% since March, U.S. Bureau of Labor Statistics Acting Regional Commissioner Jerome Watters noted in a news release. As part of the energy index, the Denver-area gasoline prices are up 24.3% in the same period, and up 41.8% compared with a year ago.
Similarly, U.S. prices are up 4.2% from a year ago, with energy prices up 23.5% in the same period, while gasoline was up 40.5%.
Overall costs of food also continued to rise and was up 1.8% from a year ago. The cost of dining out at restaurants grew 2.9%, while buying groceries to cook food at home was 1.1% more than last year in the Denver metro.
Prices for gas have increased since the war in Iran started in late February, and that’s partially led to higher inflation in the U.S. and Denver, which had an annual inflation rate of 2.6% in January.
The U.S. launched new airstrikes against Iran Tuesday night after a U.S. Army helicopter collided with an Iranian drone near the Strait of Hormuz, where transporting oil has been at a near standstill for several months.
But while the average price for a gallon of regular gas in Colorado shot up 10 cents overnight to $4.27 on Wednesday, the national average did not. The U.S. price dropped a penny to $4.15 since, according to travel site AAA.
Anytime there’s a hint of positive or negative impact on the U.S. due to geopolitics, that’s likely to impact gas prices. But that’s not the only reason why gas prices go up or down, said Skyler McKinley, AAA’s regional director for Colorado.
“There’s about a million different things that happen between oil coming out of the ground and gas going into your car. And some of that is international,” McKinley said. “But it can also be down to micro level where there’s fierce competition between service stations in a neighborhood. So when we see these regional variations, like 10-cents in a day in Colorado, I always caution against ascribing them to one of the broader trend lines.”
Colorado’s gas prices are about the same as they were a week ago, but 40% higher than a year ago. AAA doesn’t project where gas prices will be tomorrow, or for the summer. That would be pure speculation and anyone who does that “is either being foolhardy or lying to you,” McKinley said. So, the travel company can’t say whether it’s a good time to take a road trip.
However, he pointed out that in 2022 when gas prices were at record levels, AAA asked consumers about their travel plans. Travel behavior was “pretty resilient” and folks, despite higher gas prices, still planned to travel, and did so.
AAA’s recent Memorial Day forecast also found that an all-time high number of 45 million people were traveling, though some may be saving money by eating out less on the road or opting for cheaper hotels.
“That’s a bonkers number of travelers,” McKinley said. “There’s a tale of two economies and there always has been with travel. There are the folks who are able to take time away from work and have the discretionary income to travel. And there’s the folks who sort of need an economic miracle to happen. … So we are not seeing fewer people travel, we are seeing slower growth of the travel economy.”
This is a developing story and may be updated.