U.S. Inflation Flat in January As Consumer Prices Checked by Lower Gasoline

Inflation in the United States was muted in January thanks in large part to lower gasoline prices, according to government data released Wednesday, February 13, 2019.

In the longer haul, annual gains in overall consumer prices were also limited by falling energy prices even as the cost of food climbed. Stripping the two items had the core rate steady at its same level for a third straight month.

U.S. consumer prices in January were unchanged for a third month in a row, the Labor Department said in its monthly report on the Consumer Price Index. The CPI is a broad measure of what Americans pay for everything from chicken to cars.

In key pricing categories:

  • Prices at the pump fell 5.5% after sliding 5.8% previously. Gasoline prices sank 10.1% from a year ago. The broader index for energy, which combines items like gasoline, electricity and fuel oil, declined 3.1% in January after falling 2.6% in December. Energy prices fell 4.8% year-over-year.

  • Overall food prices climbed 0.2% after advancing 0.3% previously. They rose 1.6% over the last 12 months.

Excluding the more volatile food and energy components, so-called core consumer prices climbed 0.2% in January for the fifth consecutive month.

"The indexes for shelter, apparel, medical care, recreation, and household furnishings and operations were among the indexes that rose," the report noted, "while the indexes for airline fares and for motor vehicle insurance declined.

Shelter or housing costs moved up 0.3% for a third month in a row, keeping their year-over-year increase at 3.2%. 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 figure, U.S. inflation over the 12 months ended January slowed to 1.6% from 1.9%. The inflation level was the smallest since June 2017.

Core inflation rose 2.2% from a year earlier for a third straight time. The core annual rate 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.

"Inflation still appears to be well in check," Reuters quoted Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. "That should be enough for the Fed to take time to evaluate the gradual effects of its prior rate hikes and move more slowly and thoughtfully in administering rate policy in the months ahead."

The following table of key inflation figures is for the last nine months through January, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on February 13, 2019. 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 2018 to January 2019 Consumer Prices – Gains & Losses in Percent

  July 2018 Aug 2018 Sept 2018 Oct 2018 Nov 2018 Dec 2018 Jan 2019 12 Month
All items 0.2 0.2 0.1 0.3 .0 .0 .0 1.6
  Food 0.1 0.1 0.1 .0 0.2 0.3 0.2 1.6
    Food at home 0.2 .0 -0.1 -0.1 0.1 0.3 0.1 0.6
    Food away from home 0.1 0.2 0.2 0.1 0.3 0.4 0.3 2.8
  Energy .0 0.5 -1.0 2.1 -2.8 -2.6 -3.1 -4.8
    Energy commodities 0.2 0.6 -1.1 2.6 -5.0 -5.7 -5.3 -9.7
      Gasoline (all types) 0.2 0.5 -1.2 2.7 -5.2 -5.8 -5.5 -10.1
      Fuel oil 1.1 1.6 -0.7 3.2 -2.9 -9.4 -1.3 -8.1
    Energy services -0.4 0.4 -0.9 1.3 0.2 1.5 -0.5 1.3
      Electricity -0.3 0.3 -0.7 1.8 0.2 0.4 -0.6 0.4
      Utility (piped) gas service -0.9 0.7 -1.5 -0.5 0.2 5.1 -0.3 4.3
  All items less food, energy 0.2 0.1 0.2 0.2 0.2 0.2 0.2 2.2
    Commodities less food, energy .0 -0.2 -0.1 0.3 0.2 .0 0.4 0.3
      New vehicles 0.1 .0 .0 -0.2 .0 .0 0.2 .0
      Used cars and trucks 0.6 0.5 -2.1 2.5 2.5 -0.5 0.1 1.6
      Apparel -0.3 -1.3 0.9 0.2 -0.6 .0 1.1 0.1
      Medical care -0.8 -0.3 -0.2 -0.1 0.5 -0.4 0.1 -0.3
    Services less energy 0.3 0.2 0.3 0.2 0.2 0.2 0.2 2.8
      Shelter 0.3 0.3 0.2 0.2 0.3 0.3 0.3 3.2
      Transportation 0.6 0.1 0.5 0.1 .0 -0.1 -0.2 2.0
      Medical care 0.1 -0.1 0.3 0.2 0.4 0.4 0.3 2.4

 

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 12, 2019.

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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