Cost of living dips as gas prices fall

by Joe Estrella @ Idaho Statesman
October 19, 2006

Treasure Valley consumer prices fell 1 percent in September, thanks to an almost 6 percent drop in area gasoline costs, according to the monthly Wells Fargo Boise Area Cost of Living Report. It was the second consecutive month that area inflation has declined.
But area gasoline costs remain 25 cents above the national average, AAA Idaho reported Wednesday.

"Boise saw a welcome 5.6-percent decrease in transportation costs during September, and utility expenses also went down, more than offsetting gains in grocery, restaurant and health-care costs," said Sterling K. Jenson, regional managing director of Wells Capital Management."

The report showed increases in the price of health care and clothing last month, while utility costs were down more than 1.3 percent.

Even with last month’s decline in pump prices, area gas costs have risen 6.4 percent in the last six months, the report said.

AAA Idaho reported Wednesday that the cost of self-service regular unleaded in the Valley now averages $2.47 a gallon, down 51 cents in the last month, but still 25 cents higher than the U.S. average.

"Assuming that gas prices mirror what’s happening with crude oil and gasoline futures markets, we think Idaho’s gasoline prices should be significantly lower than they are right now," AAA spokesman Dave Carlson said in a statement.

Nationally, the Labor Department reported that its closely-watched Consumer Price Index fell 0.5 percent last month, the biggest decline in U.S. consumer costs since a 0.7 percent fall in November of last year. Core inflation, which excludes energy and food, edged up by 0.2 percent, the third straight month of modest gains following higher readings earlier in the year. Wells Fargo does not measure core inflation in the Treasure Valley.

Analysts believe the bigger-than-expected decline in consumer prices should help reassure investors that a slowing economy is helping to reduce inflation pressures according to the script written by the Federal Reserve.