MW: Gasoline lifts consumer prices 0.2% in January
Year-over-year core rate’s growth highest since September 2008
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — With gasoline rising at the pump for the first time in four months, U.S. consumer prices for January increased at the largest rate since September, the Labor Department reported Friday.
The consumer price index rose a seasonally adjusted 0.2% on the month, slightly below economists’ consensus expectations of a 0.3% increase.
Energy prices rose 0.2% last month, also the first increase since September.
The core CPI — the measure of retail-level inflation that strips out food and energy prices to get a better handle on underlying inflationary trends — increased 0.2% on a seasonally adjusted basis, in line with expectations.
Core prices have been increasing at a rate of either 0.1% or 0.2% since the summer.
Michael Feroli, economist at J.P. Morgan Chase, said this pace was high enough to avoid any deflationary concerns.
Over the past 12 months, the CPI is up 2.9%. Inflation has been moderating after hitting a 3.9% annual rate in September.
However, core inflation has been firming slightly. The core CPI is up 2.3% over the past year, the largest gain since September 2008.
Federal Reserve officials said that they expect inflation to moderate in the near term after last year’s spike in commodity prices.
If inflation stays low, it may increase the odds of another round of quantitative easing, or QE, later this year.
Economists at Goldman Sachs are forecasting a significant decline in inflation over the coming year.
Details of the CPI
With prices rising 0.2% for urban workers and average hourly earnings also up 0.2%, weekly earnings were flat in January on an inflation-adjusted, or real, basis.
Real weekly earnings are down 1.0% in the past year.
In January, housing prices were up 0.1%. Housing prices were up 1.9% in the past year. Owners equivalent rent rose 0.2% in the month.
Food prices rose 0.2% in January, putting the annualized rate of increase at 2.9%. Prices of food purchased to consume at home were flat last month.
Energy prices rose 0.2%, including a 0.9% increase in gasoline prices, while natural-gas and fuel-oil prices dropped. Energy prices are up 6.1% in the past year.
Apparel prices rose 0.9% in January and are up 4.7% in the past year.
Transportation prices increased 0.3% on the recent move higher in gasoline prices.
Prices for new car prices were flat, while air fares fell 0.9%.
