Consumer prices rose slightly in January with unusually cold weather blamed for the sharp increases in electricity, natural gas and fuel oil that offset lower prices at the pump.
The Consumer Price Index, or CPI, rose 0.1% last month after a 0.2% advance in the prior month, the US Labor Department reported Thursday, February 20, 2014. The tame rise was right at the forecast level of most economists, according to major media outlets.
Overall energy prices climbed 0.6% in January, boosted by increases of 3.7% in fuel oil and 1.8% in electricity — the biggest jump since March 2010. As mentioned, consumers paid less at the pump with gasoline prices down 1%. In December, the overall energy index rose 1.6%, led by a 2.6% surge in gasoline costs.
Food prices picked up a tad in January, up 0.1% after being flat in the previous month. The cost of cereal, bakery products, dairy, meats, poultry, fish and eggs increased while prices for fruits and vegetables declined.
Discounting food and energy prices, the so-called core inflation rate also advanced 0.1%, matching the prior month.
12-Month Change in Consumer Prices
During the January 2013 to January 2014 period, the annual inflation rate rose 1.6% compared to the 1.7% increase in 2013.
Core consumer prices on an annual basis also rose 1.6%, coming on the heels of the 1.5% gain in 2013. The Federal Reserve has a target annual inflation rate of 2%, pegging that level as optimal for economic improvement given current conditions.
Growth picked up in the second half of 2013, and "at the same time we just don’t see any inflation to speak of," said Dennis Lockhart, President of the Federal Reserve Bank of Atlanta. "Generally you would expect inflation to be associated with growth."
"Does that suggest we are misreading the underlying strength of the economy? It’s possible," he said. Still "my outlook is we will gradually see a rise in inflation" as growth rises.
As always, here is a table of major consumer prices by category and their month-over-month changes. The prices for these items are collected and published by the Bureau of Labor Statistics (BLS) each month.
US Inflation: July 2013 – January 2014 Consumer Prices
| Jul 2013 | Aug 2013 | Sept 2013 | Oct 2013 | Nov 2013 | Dec 2013 | Jan 2014 | 12 Month | |
| All items | 0.2 | 0.1 | 0.1 | .0 | 0.1 | 0.2 | 0.1 | 1.6 |
| Food | 0.1 | 0.1 | .0 | 0.1 | 0.1 | .0 | 0.1 | 1.1 |
| Food at home | 0.1 | 0.1 | .0 | .0 | .0 | .0 | 0.1 | 0.5 |
| Food away from home | 0.2 | 0.2 | 0.1 | 0.1 | 0.3 | 0.1 | 0.1 | 2.0 |
| Energy | 0.2 | -0.4 | 0.3 | -0.9 | -0.4 | 1.6 | 0.6 | 2.1 |
| Energy commodities | 0.7 | -0.4 | -0.1 | -1.5 | -0.8 | 2.6 | -0.5 | 0.5 |
| Gasoline (all types) | 0.8 | -0.5 | -0.2 | -1.6 | -0.8 | 2.6 | -1.0 | 0.1 |
| Fuel oil | 1.1 | 1.2 | 0.9 | -0.6 | 0.4 | 2.4 | 3.7 | 2.0 |
| Energy services | -0.6 | -0.5 | 0.8 | 0.1 | .0 | 0.1 | 2.2 | 4.5 |
| Electricity | -0.1 | -0.1 | 0.5 | 0.2 | 0.5 | 0.4 | 1.8 | 4.4 |
| Utility (piped) gas service | -2.1 | -1.8 | 1.6 | -0.5 | -1.5 | -1.0 | 3.6 | 4.9 |
| All items less food, energy | 0.2 | 0.1 | 0.1 | 0.1 | 0.2 | 0.1 | 0.1 | 1.6 |
| Commodities less food, energy | .0 | .0 | -0.1 | -0.1 | .0 | .0 | -0.1 | -0.3 |
| New vehicles | .0 | .0 | .1 | -0.1 | -0.1 | .0 | -0.3 | .0 |
| Used cars and trucks | -0.4 | -0.1 | 0.3 | 0.4 | 0.3 | .0 | -0.5 | 1.5 |
| Apparel | 0.6 | 0.2 | -0.4 | -0.4 | -0.1 | 0.4 | -0.3 | -0.3 |
| Medical care | 0.2 | 0.3 | 0.2 | 0.3 | 0.1 | -0.6 | 0.5 | 0.8 |
| Services less energy | 0.2 | 0.2 | 0.2 | 0.2 | 0.3 | 0.1 | 0.2 | 2.3 |
| Shelter | 0.2 | 0.2 | 0.2 | 0.1 | 0.3 | 0.2 | 0.3 | 2.6 |
| Transportation | 0.5 | -0.3 | 0.2 | 0.4 | 0.3 | -0.4 | 0.1 | 1.2 |
| Medical care | 0.2 | 0.6 | 0.3 | .0 | .0 | 0.2 | 0.2 | 2.5 |
And once again, here is the latest Consumer Price Index summary that the BLS released early Thursday, February 20, 2014.
Consumer Prices Summary for January 2014
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.6% before seasonal adjustment.
Increases in the indexes for household energy accounted for most of the all items increase. The electricity index posted its largest increase since March 2010, and the indexes for natural gas and fuel oil also rose sharply. These increases more than offset a decline in the gasoline index, resulting in a 0.6% increase in the energy index.
The index for all items less food and energy also rose 0.1% in January. A 0.3% increase in the shelter index was the major contributor to the rise, but the indexes for medical care, recreation, personal care, and tobacco also increased. In contrast, the indexes for airline fares, used cars and trucks, new vehicles, and apparel all declined in January. The food index rose slightly in January. The index for food at home rose 0.1%, with major grocery store food groups mixed.
The all items index increased 1.6% over the last 12 months; this compares to a 1.5% increase for the 12 months ending December. The index for all items less food and energy has also risen 1.6% over the last 12 months. The energy index has risen 2.1% over the span, and the food index has increased 1.1%.
Food Inflation
The food index rose 0.1% in January. The food at home index increased 0.1%, with the major grocery store food group indexes mixed. Three of the six increased, including the indexes for cereals and bakery products and for dairy and related products, which both rose 0.5%. The index for meats, poultry, fish, and eggs also increased, rising 0.4%. In contrast, the fruits and vegetables index declined in January, falling 0.3%, while the index for nonalcoholic beverages fell 0.2%. The index for other food at home was unchanged in January.
The food index has risen 1.1% over the past year, with the food at home index up 0.5%. The index for meats, poultry, fish, and eggs has risen 3.3% over the last 12 months. The index for cereals and bakery products has also risen over that span, but the other major grocery store food group indexes have declined. The index for food away from home rose 0.1% in January and has increased 2.0% over the last 12 months.
Energy Inflation
The energy index rose 0.6% in January as a decline in the gasoline index was more than offset by increases in household energy components. The electricity index rose 1.8%, its largest increase since March 2010. The index for natural gas also rose sharply, increasing 3.6%, and the fuel oil index increased 3.7%. The gasoline index, which rose in December, fell 1.0% in January. (Before seasonal adjustment, gasoline prices rose 1.4% in January.) The energy index has increased 2.1% over the last year, with all major components posting increases, though the gasoline index has increased only 0.1%.
All items less food and energy
The index for all items less food and energy rose 0.1% in January. The shelter index rose 0.3%, with the indexes for rent and owners’ equivalent rent both rising 0.2%, and the index for lodging away from home advancing 1.3%. The medical care index rose 0.3% in January. The index for medical care commodities advanced 0.5% as the prescription drug index rose 0.6%.
The index for medical care services increased 0.2%. The recreation index rose 0.2%, as did the index for personal care. The tobacco index increased 0.7%, its largest increase since July. In contrast to these increases, the index for airline fares fell sharply in January, declining 2.2%. The index for used cars and trucks fell 0.5%. The new vehicles index declined as well, falling 0.3%. The apparel index, which rose in December, also declined 0.3%. The index for household furnishings and operations was unchanged in January.
The index for all items less food and energy has risen 1.6% over the last 12 months; this is the smallest 12-month change since June. The shelter index has risen 2.6% over the last 12 months, while the medical care index has risen 2.1%. The indexes for airline fares and apparel have both declined over the last year.
Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.6% over the last 12 months to an index level of 233.916 (1982-84=100). For the month, the index rose 0.4% prior to seasonal adjustment.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.6% over the last 12 months to an index level of 230.040 (1982-84=100). For the month, the index rose 0.4% prior to seasonal adjustment.
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 1.4% over the last 12 months. For the month, the index rose 0.4% on a not seasonally adjusted basis. Please note that the indexes for the post-2012 period are subject to revision.
Next Release
The Consumer Price Index for February 2014 is scheduled to be released on Tuesday, March 18, 2014, at 8:30 a.m. (EDT).