Annual U.S. Inflation Steady at 1.4%; Consumer Prices in January Highest in 5 Months

U.S. consumer inflation rose the most in five months, but was nevertheless mostly tame in January, according to a government report released Wednesday, Feb. 10.

Inflation over the past year read pretty much the same as the period ending in December with food prices higher and energy prices lower.

U.S. consumer prices picked up 0.3% in January after rising 0.2% in December, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from cereal to cars. The monthly gain was the biggest since the 0.4% increase in August.

In key consumer pricing categories:

  • Prices at the pump jumped 7.4% in January following a 5.2% increase in December. Despite those gains, gasoline dropped 8.6% over the past year.

  • The broader index for energy, which combines items like gasoline, electricity and fuel oil, increased 3.5% for the month from 2.6% previously. Energy prices declined 3.6% in the past 12 months.

  • Prices for food grew at a slower rate, rising 0.1% for the month from 0.3% in December. Food prices went up 3.8% over the last 12 months.

Excluding the more volatile food and energy components, so-called core consumer prices were unchanged for a second month in a row.

"The indexes for apparel, medical care, shelter, and motor vehicle insurance all increased over the month. The indexes for recreation, used cars and trucks, airline fares, and new vehicles all declined in January," the Labor Department’s monthly report noted.

Health care prices rose 0.4% in January after dipping 0.2% in December. Health care costs increased 1.9% from the prior year.

While prices for used cars and trucks declined 0.9% for a second month in row, they are up 10% over the last 12 months.

Shelter or housing costs inched 0.1% higher for a sixth straight month. They gained 1.6% from a year ago. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. The index accounts for about one-third of the entire CPI.

In the headline annual figure, inflation in the United States advanced 1.4% in January, the same rate of increase as for the period ending in December.

Core inflation also rose 1.4% over the past 12 months, against 1.6% previously. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.

The following table of key inflation figures is for the last seven months through January, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on Feb. 10, 2021. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

July 2020 to January 2021 Consumer Prices – Gains & Losses in Percent

  July 2020 August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 12 Month
All items 0.5 0.4 0.2 0.1 0.2 0.2 0.3 1.4
  Food -0.3 0.1 0.1 0.2 .0 0.3 0.1 3.8
    Food at home -0.9 .0 -0.3 0.1 -0.2 0.3 -0.1 3.7
    Food away from home 0.5 0.3 0.6 0.3 0.1 0.4 0.3 3.9
  Energy 2.1 0.9 1.4 0.6 0.7 2.6 3.5 -3.6
    Energy commodities 4.5 2.1 1.4 0.7 0.5 5.1 7.3 -8.7
      Gasoline (all types) 4.8 2.1 1.7 0.7 0.5 5.2 7.4 -8.6
      Fuel oil 4.5 2.2 -3.0 0.7 3.3 10.2 5.4 -16.5
    Energy services .0 -0.2 1.3 0.5 0.9 0.2 -0.3 2.1
      Electricity 0.2 -0.2 0.8 0.6 0.3 0.4 -0.2 1.5
      Utility (piped) gas service -0.7 -0.1 3.1 0.4 3.0 -0.4 -0.4 4.3
  All items less food, energy 0.5 0.3 0.2 0.1 0.2 .0 .0 1.4
    Commodities less food, energy 0.7 1.0 0.5 .0 .0 0.1 0.1 1.7
      New vehicles 0.7 .0 0.3 0.3 .0 0.4 -0.5 1.4
      Used cars and trucks 2.8 5.7 5.3 0.9 -1.4 -0.9 -0.9 10.0
      Apparel 0.7 0.4 -0.4 -0.9 0.7 0.9 2.2 -2.5
      Medical care .0 0.3 -0.6 -0.7 -0.4 -0.2 -0.1 -2.3
    Services less energy 0.5 0.1 0.1 0.1 0.2 .0 .0 1.3
      Shelter 0.2 0.1 0.1 0.1 0.1 0.1 0.1 1.6
      Transportation 2.8 -0.7 -0.3 0.2 1.3 -0.6 -0.3 -4.1
      Medical care 0.5 0.1 .0 -0.3 -0.1 -0.1 0.5 2.9

 

The BLS tends to release inflation data around the middle of a month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for February and the latest annual period become public on March 10, 2021.

CPI data is used in calculating inflation rates and in this site’s U.S. Inflation Calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.

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