Also pushing the increase was the rising cost of gasoline, which increased 3.9 percent during the same period. Honolulu drivers now pay 10 percent more for a gallon of gas than they did for the first half of 2003.

Grocery prices rose 2.8 percent in the last six months. Apparel prices were up 4.9 percent, the largest increase recorded over the last six months.

The figures were released by the department's Bureau of Labor Statistics.

Consumer prices overall increased 3.3 percent compared with the same period a year ago.

The housing index recorded the largest six-month increase — 2.4 percent — since the second half of 1993.

Housing prices were 4.1 percent higher than they were at this point in 2003.

"I think it's higher than I expected but our economy has been doing very well," said Pearl Imada Iboshi, the state's chief economist.

"I don't think it is a good thing," she added. "We would rather see strong economy with less inflation. The very strong demand in housing and the external increases of oil are contributing to the rise."

Bank of Hawaii economist Paul Brewbaker said the 3.3 percent CPI increase is a fairly dramatic shift from what Honolulu has enjoyed for the last decade when the rate of inflation was about 1 percent.

"Our day in the sun sort of ended a year ago," he said. "Now you may be looking for shade and there isn't any."

The effect of home prices was expected, but not the rise in fuel costs, he said.

Those factors tend to have a persistent, corrosive effect on the CPI, he said.

The consumer price index "will continue to reflect the higher cost of housing for several years," Brewbaker said. "This is going to continue to drive this at comparatively high rates of inflation."

The consumer price index for Honolulu now stands at 189.2. This means that a basket of goods that cost $100 between 1982 and 1984 cost $189.20 during the first six months of this year.