The rising cost of trips to the supermarket, along with historic prices for gasoline and higher electricity costs, helped push up inflation in Honolulu last year, though at a slower pace than the two previous years.

Honolulu's consumer price index was 4.3 percent last year, according to the U.S. Bureau of Labor Statistics, which twice a year reports on inflation here.

The report pointed to a slowing of inflation from 2006 when the consumer price index jumped to a 15-year high of 5.9 percent. But the full-year number did not tell the whole story, which involved price increases during the first six to nine months followed by decelerating gains.

"Most of the rise was in the first half of the year," said Amar Mann, an economist with the Bureau of Labor Statistics in San Francisco.

Honolulu's inflation was stoked by increasing prices in several areas, including electricity and natural gas (up by one-third for the year), groceries (up 8.2 percent for the year) and gasoline, which surged to a record high in Honolulu in late July at $4.39 for a gallon of regular.

Electricity prices for Honolulu households also rose steadily through the year, hitting 32.5 cents per kilowatt-hour in September before receding.

But since that time, inflation has been coming down as the economy cools and oil prices fall to lower levels.

In general, high inflation rates are a concern for consumers, who see their purchasing power decline unless they receive pay raises. Since 2004, Honolulu's inflation rate has risen faster than the national average for cities, with the local rate standing 2.6 percentage points higher than the national average in 2006.

The gap between the two has been narrowing, and last year the local rate of 4.3 percent compared with the national cities' rate of 3.8 percent.

This year the inflation rate may drop below the national average, said Eugene Tian, research and statistics officer for the state Department of Business, Economic Development and Tourism and also an economist. DBEDT has forecast a 2.6 percent inflation rate for 2009.

Tian said Honolulu has traditionally averaged around 3 percent inflation and that low inflation is not necessarily a good thing.

"When inflation is low most of the time, it indicates low economic growth," Tian said. There also is a correlation between falling inflation and rising unemployment. Hawai'i's inflation rate reached 5.5 percent last year, the highest in a decade.

He said DBEDT's economic forecasters expect inflation to slip because of lower income activity, housing and energy prices.

"Inflation going forward is going to go down," he said. "We expect it."

Mann said it appears as if inflation is moderating at the national level, with the rate about flat in January.

The Consumer Price Index for Honolulu rose to 230.387 during the second half of 2008. This means that a basket of goods that cost $100 between 1982 and 1984 now costs $230.39.

The index is used in computing cost-of-living raises in some union contracts.