Energy Prices Push Consumer Prices Higher in January


Consumer prices increased in January as energy prices increased. However, “core” consumer prices were unchanged, indicating that inflationary pressures remained muted as the economy continues to recover amid the COVID-19 pandemic.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.3% in January on a seasonally adjusted basis, faster than a 0.2% increase in December. Excluding the volatile food and energy components, “core” CPI was unchanged in January. While the indexes for apparel (2.2%), medical care (0.4%), shelter (0.1%), and motor vehicle insurance (1.6%) all rose over the month, the indexes for used cars and trucks (-0.9%), recreation (-0.6%), airline fares (-3.2%), and new vehicles (-0.5%) all declined.

Energy prices continued to rise in January. The price index for a broad set of energy sources rose by 3.5%, after an increase of 2.6% in December. It marks the biggest monthly increase since July. The jump in energy prices accounted for most of the increase in overall prices. The food index rose by 0.1% in January, after a 0.3% increase in December. The index for food at home fell by 0.1% in January, while the index for food away from home rose by 0.3%.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 1.4% in January, the same increase as in December. Meanwhile, the “core” CPI increased by 1.4% over the past twelve months, slower than a 1.6% increase in December. The food index rose by 3.8% and the energy index declined by 3.6% over the past twelve months.

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