Inflation is stabilizing, but Hawaii food costs high

Honolulu’s inflation rate is easing, but prices for some items are still higher than they were last year, according to federal data.

The U.S. Bureau of Labor Statistics reported Tuesday that inflation — as measured by the consumer price index — in May rose 2.0% over the past year for Honolulu, continuing a downward trend.

In March, Oahu’s rolling 12-month inflation rate fell to 3.3% compared with the previous rate of 5.2% in January.

State economists consider the stabilizing inflation rate to be good news for Hawaii overall.

“It is good news because 2% is the average of the 10 years between 2009 and 2019,” said the state’s chief economist, Eugene Tian. “In normal economic conditions for both the U.S. and Hawaii, it’s about 2%. That’s why the Federal Reserve set the target at 2%, so we are actually coming to a normal inflation environment.”

Tian, who is with the state Department of Business, Economic Development and Tourism, projects inflation for the full year to settle at about 3.1%, lower than the projected U.S. consumer inflation rate of 4.0%.

The latest increase was influenced by higher prices for food and shelter, according to BLS, balanced by a decline in energy prices.

In Honolulu, energy prices in May decreased 7.3% compared with a year ago, due mostly to a decline in electricity and gasoline prices.

Prices for electricity declined 3.1%, while prices for all types of gasoline declined 10.7% in May compared with a year ago.

The average cost for a gallon of regular gasoline Tuesday in Honolulu was at $4.64, compared with $5.42 a year ago, according to AAA.