US inflation ticked higher in January as Americans paid more at the pump for the first time in four months, government data released on Friday revealed. However, consumer prices dipped a bit over the past year as compared to the previous 12-months ending in December.
Consumer prices rose 0.2 percent in January, marking the biggest jump since September and coming on the heels of two straight flat monthly readings.
Food and energy costs are among the items that drove US inflation higher as both of the government-watched indexes advanced 0.2 percent in January. The increase for food actually matched the previous month. However, energy prices tumbled 1.3 percent in December and the change into January accounted for a more noticeable burden on the wallet. Advances occurred in other areas as well, the government noted.
"The apparel index rose sharply, and the indexes for shelter, recreation, medical care, and tobacco increased as well," the US Labor Department said in its monthly Consumer Price Index (CPI) report which is seen as the government’s key barometer for US inflation.
On the flip side, consumers paid less for used cars and trucks and for airline fares.
Stripping out the more volatile energy and food categories, the so-called core US inflation rate also increased 0.2 percent in January after advancing 0.1 percent in December.
Over the past 12 months, US inflation was up 2.9 percent after the reported 3.0 percent gain in December. The latest increase was the smallest year-to-year advance since March 2011 and contrasts starkly against the 3.8 percent annual rate in September 2011.
The core US inflation rate rose 2.3 percent over the past year for the biggest increase since September 2008. The same 12-month reading in December was at 2.2 percent. The level can affect US monetary policy and remains higher than the Fed’s 2.0 percent target. It is also in somewhat of a conflict with recent Fed thinking.
"Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable," stated the Fed’s FOMC statement for January which was released on February 15. "The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee’s dual mandate," it added.
The following table provides US Labor Department inflation data ranging from July to January and on a 12-month basis.
January 2012 Consumer Prices – Gains (percent)
|Food at home||0.6||0.6||0.6||0.1||-0.1||0.3||.0||5.3|
|Food away from home||0.2||0.4||0.2||0.2||0.3||0.2||0.4||3.1|
|Gasoline (all types)||4.7||1.9||2.9||-3.1||-2.4||-2.0||0.9||9.7|
|Utility (piped) gas service||-1.2||2.2||0.8||-3.0||-4.4||-0.8||-2.9||-5.5|
|All items less food, energy||0.2||0.2||0.1||0.1||0.2||0.1||0.2||2.3|
|Comm. less food, energy||0.3||0.4||-0.2||-0.1||0.1||-0.2||0.2||2.2|
|Used cars and trucks||0.7||0.9||-0.6||-0.6||-0.1||-0.9||-1.0||3.2|
|Services less energy||0.2||0.2||0.2||0.2||0.2||0.3||0.2||2.3|
The US Labor Department will publish February 2012 Consumer Price Index information on March 16, 2012 at 8:30 AM Eastern Time. Current and historic CPI data is used as the core data for the US Inflation Calculator.
The following text seems errant – inflation is not negative, so prices are going up, not down. Perhaps the intent was that the inflation rate is a tad lower, but inflation is still positive, and therefore prices are rising.
“However, consumer *PRICES* dipped a bit over the past year as compared to the previous 12-months ending in December.”