The annual pace of inflation slowed for a seventh straight month and marked the lowest rate in 15 months, but U.S. consumer prices in January logged their biggest gain in three months, according to a U.S. government report released Tuesday, Feb. 14.
Elevated prices for consumer goods and services remained mostly broad-based, for the month and compared to a year earlier, especially for food and shelter — with the later rising the most annually since 1982.
In the headline monthly figure, U.S. consumer prices increased 0.5% in January, after a revised December increase of 0.1% from a decline of 0.1%, 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 coffee to cars.
Overall food prices climbed more, up 0.5% for the month from 0.4%. Within the category, grocery prices eased to 0.4% against 0.5% previously, while the cost of eating out picked up 0.6% from 0.4%.
Food inflation year-over-year remained high at 10.1% but down from 10.4%. Over the same time, grocery prices rose 11.3% from 11.8%. Meanwhile, prices for foods consumed outside of the home increased 8.2% through the year from 8.3%.
Prices at the pump increased 2.4% in January compared to a revised drop of 7% in December. Their year-on-year level moved up 1.5% after falling 1.5% previously. Last year’s high-water mark happened in the 12 months ending June when gasoline inflation at 59.9% was the highest since March 1980.
The broader index for energy, which combines items like gasoline, electricity, and fuel oil, increased 2% for the month after a 3.1% revised drop. Energy prices rose 8.7% from a year earlier, an increase from the prior 7.3% annual rate.
Excluding the more volatile food and energy components, the rate of core consumer prices rose 0.4% in January, matching the increase in December which was revised up from 0.3%.
Shelter or housing prices for the month advanced 0.7% from 0.8%, while they jumped 7.9% year-over-year for their biggest 12-month gain since June 1982.
"The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing," the Labor Department’s monthly report said.
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. This index accounts for about one-third of the entire CPI.
In other pricing categories:
- Clothing prices for the month rose 0.8% after rising 0.2%. They increased 3.1% from a year ago.
- New vehicle prices climbed 0.2% in January, for 21 straight increases, and after rising 0.6 in December, while they increased 5.8% year-over-year.
- Prices for used cars and trucks, however, dropped for a seventh month in a row, falling 1.9% most recently, while their year-on-year level declined 11.6%. Last February and starkly contrasting, they had logged a year-on-year increase of 41.2%.
- Compared to a year earlier, airline fares increased 25.6% from 28.5%. They fell 2.1% in January after sliding 2.1% in December.
As for the headline annual figure, inflation increased 6.4% from a year earlier compared to 6.5% previously. The annual rate was the lowest since October 2021. For some perspective, last year’s high-water mark happened in the 12-month period ending July at 9.1%, which marked the fastest rate of inflation since November 1981. Still, U.S. inflation rates have topped 6% for sixteen consecutive months.
Meanwhile, core inflation rose 5.6% over the past year against 5.7% 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 guides the central bank when setting its key interest rate. As recently as September, the annual core rate at 6.6% was the highest since August 1982. Many economists look to the core reading as a better predictor for future inflation.
"Inflation is easing but the path to lower inflation will not likely be smooth," Reuters quoted Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina. "The Fed will not make decisions based on just one report but clearly the risks are rising that inflation will not cool fast enough for the Fed’s liking."
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. 14, 2023. 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 2022 to January 2023 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted from Prior Month and Unadjusted 12-Month)
|July 2022||Aug 2022||Sept 2022||Oct 2022||Nov 2022||Dec 2022||Jan 2023||12 Month|
|Food at home||1.3||0.8||0.7||0.5||0.6||0.5||0.4||11.3|
|Food away from home||0.7||0.9||0.9||0.9||0.5||0.4||0.6||8.2|
|Gasoline (all types)||-8.1||-8.4||-4.2||3.4||-2.3||-7||2.4||1.5|
|Utility (piped) gas service||-3.8||3.5||2.2||-3.7||-3.4||3.5||6.7||26.7|
|All items less food, energy||0.3||0.6||0.6||0.3||0.3||0.4||0.4||5.6|
|Commodities less food, energy||0.1||0.4||0||-0.1||-0.2||-0.1||0.1||1.4|
|Used cars and trucks||-0.8||-0.2||-1.1||-1.7||-2||-2||-1.9||-11.6|
|Services less energy||0.4||0.6||0.8||0.5||0.5||0.6||0.5||7.2|
The BLS releases inflation data around the middle of a month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for January and the latest annual period become public on March 14, 2023.
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.