The cost of living in the United States jumped the most in six months in December as prices at the pump picked up, though annual inflation in 2013 climbed by the smallest amount in three years, data released by the US Labor Department shows.
US inflation accelerated 1.5% in 2013, marking the lowest reading for a calendar year since 2010’s matching 1.5% increase. In between the two years, annual inflation rates leapt 3.0% in 2011 and drove ahead 1.7% in 2012.
The inflation increase is "lower than the 2.4 percent average annual increase over the last ten years," the US Labor Department said Thursday, Jan. 16, 2014 in its monthly Consumer Price Index (CPI) report that measures how much Americans’ pay for certain goods and services. "This is the first time the CPI has gone up less than 2.0 percent for consecutive years since 1997-98."
For the year, American consumers got a bit of a break as gasoline prices fell 1.0% as compared to their 1.7% increase in 2012. Food prices went up 1.1% in 2013 but that was tamer than their prior year advance of 1.8%.
"The price data continue to deliver the same message: no signs of inflation pressures in the U.S. economy," said Laura Rosner, an economist at BNP Paribas.
Stripping out the more volatile food and energy prices, the so-called core US Inflation rate grew 1.7% in 2013 after rising 1.9% in 2012. The increase has been fixed lately as the 12-month inflation changes reported in September, October and November were also 1.7%.
The core annual inflation rate is a key figure watched by the Fed’s Federal Open Market Committee (FOMC) as it helps the committee decide where to set its benchmark interest rate. The year-over year increase remains under the Fed’s target inflation rate of 2%.
"Core inflation is going to gradually, gradually converge to the 2 percent target that the Fed has," said Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut, who correctly projected the rise in prices. "Right now, there are just not meaningful underlying pressures on inflation."
Consumer prices ticked up 0.3% in December, the biggest increase since June and after being flat in November. Gains were led by gasoline prices, up 3.1% compared to their 1.6% decline in the prior month. Food prices held at 0.1% for a third month in a row.
Core consumer prices, or the core rate of inflation, advanced 0.1% in December after gaining 0.2% previously. Some of the core gains included housing (up 0.2%), clothing (up 0.9%), tobacco (up 0.6%) and medical services (up 0.3%). Airfares dropped 4.7% after increasing 2.6% in November. Medical are commodities fell 0.8% after being flat in the prior month.
Published below are percent changes from prices of major consumer goods and services that are surveyed and analyzed by the Bureau of Labor Statistic (BLS) of the US Department of Labor. The time periods are from June through December and over the past 12 months.
June 2012 – December 2013 Consumer Prices – Gains & Losses in Percent
|June 2013||Jul 2013||Aug 2013||Sept 2013||Oct 2013||Nov 2013||Dec 2013||12 Month|
|Food at home||0.2||0.1||0.1||.0||0.1||.0||.0||0.4|
|Food away from home||0.2||0.2||0.2||0.1||0.1||0.3||0.1||2.1|
|Gasoline (all types)||6.3||1.0||-0.1||0.8||-2.9||-1.6||3.1||-1.0|
|Utility (piped) gas service||-0.4||-2.8||-2.3||1.8||-1.0||-1.8||-0.4||-0.1|
|All items less food, energy||0.2||0.2||0.1||0.1||0.1||0.2||0.1||1.7|
|Commodities less food, energy||0.2||.0||.0||-0.1||-0.1||-0.1||.0||-0.1|
|Used cars and trucks||-0.4||-0.4||-0.1||.0||0.3||0.1||-0.2||2.0|
|Services less energy||0.2||0.2||0.2||0.2||0.2||0.3||0.1||2.3|
Updates on United States inflation are published by the Bureau of Labor Statistics about two weeks into a new month after analyzing data collected by the end of the reference month. The BLS has scheduled the data release of January inflation in the form of the Consumer Price Index (CPI) on February 20, 2014.
The Consumer Price Index is used to calculate inflation rates and it is used by this site’s Inflation Calculator. The calculator shows accumulated inflation and the change in buying power of the US dollar between two dates.