Honolulu inflation rate increased 1.1 percent in 1st half of year
HONOLULU (AP) — Honolulu’s consumer price index lags the national rate for the first time in 11 years, thanks to a decrease in apparel prices.
Inflation rose 1.1 percent during the first half of 2014 compared with the same period last year, according to statistics released Tuesday by the U.S. Bureau of Labor Statistics. The national inflation rate was 1.7 percent in the same period. Last year, Honolulu inflation increased just 0.5 percent from the second half of 2013.
Clothing was the main driver for the low inflation after the sector dropped 5.9 percent from the year-earlier period, said Eugen Tian, chief economist for the state Department of Business, Economic Development and Tourism.
Local inflation was higher than the U.S. for more than a decade, Tian said: “Inflation goes in cycles, and now I think it will be lower than the U.S. for a while — maybe for 10 years.”
Clothing prices have been declining for a year and a half, Tian said.
In 2013, apparel pricing was down 2.3 percent in the first half of the year from the year-earlier period.
“From a national standpoint, I think retail apparel is a very competitive market,” said Sheri Sakamoto, president of Retail Merchants of Hawaii. “So, it’s possible what our national stores are doing is trying to meet the needs of their consumers.”
Small retailers haven’t decreased their prices, but they’ve kept prices flat, Sakamoto said.
Hawaii, which has the highest electricity costs in the nation, saw prices in that sector rise 2.8 percent during the first six months of 2014 over the year-ago period. Education and communication increased 2.7 percent, recreation rose 2.5 percent and transportation was up 2.1 percent. Shelter was up 0.6 percent, and gas prices decreased 2 percent.
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