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Economy in Brief

U.S. Consumer Price Inflation Remains Modest
by Tom Moeller  February 13, 2020

The Consumer Price Index edged up minimally during January. The 0.1% uptick followed two months of 0.2% increase. A 0.2% rise had been expected in the Action Economics Forecast Survey. Despite the weak yearend showing, the 2.5% y/y gain in the CPI was the largest since October 2018. The CPI excluding food & energy rose an expected 0.2% last month (2.3% y/y) after edging 0.1% higher in December.

A 0.7% decline (+6.2% y/y) in energy prices held back the rise in the CPI. It followed three firm increases. Gasoline prices declined 1.6% (+12.8% y/y) following after a 3.1% strengthening. Fuel oil prices eased 0.4% (+6.5% y/y) after a 1.1% rise. Natural gas prices strengthened 1.0% (-3.2% y/y) after a 0.5% easing. The cost of electricity rose 0.4% (0.5% y/y).

Goods prices excluding food & energy also were tame, holding steady (-0.3% y/y) for the second consecutive month. Education & communication goods prices fell 1.2% (-6.4% y/y), the fourth sharp decline in the last five months. Used car & truck prices also were off 1.2% (-2.0% y/y). Household appliance prices weakened 0.8% (-2.1% y/y) after a 0.3% fall. Medical care product prices eased 0.6% (+1.7% y/y) following a 1.0% increase, and the cost of furniture slipped 0.1% (-0.0% y/y). New vehicle prices held steady (0.1% y/y). Working higher were apparel prices by 0.7% (-1.3% y/y) following a minimal rise in the prior month. Sporting goods prices rose 0.6% (0.8% y/y) as they reversed December's decline. Recreation goods improved 0.1% (-1.1% y/y) but video & audio equipment prices declined 0.9% (-10.8% y/y).

Services prices rose 0.3%. The 3.1% y/y increase was the strongest since July 2018, up from 2.7% early last year. Education & communication prices strengthened 0.4% (2.2 y/y), the largest rise since January 2014. Shelter costs also rose 0.4% (3.3% y/y) as rents increased 0.4% (3.8% y/y). The owners equivalent rent of primary residences gained 0.3% (3.4% y/y). Recreation services prices rose 0.3% (2.6% y/y) as video & audio services prices improved 0.4% (2.9% y/y). Medical care service prices rose 0.3% (5.1% y/y) for a second month while public transportation costs gained 0.2% (1.8% y/y).

Food prices rose 0.2% (1.8% y/y) for a second straight month. Meat prices increased 0.3% (3.4% y/y) after surging 1.2%, while dairy product prices improved 0.2% (2.7% y/y). Cereal & bakery product prices declined 0.4% (+0.3% y/y) following a 0.3% decline while fruit & vegetable prices eased 0.1% (-1.0% y/y). Egg prices declined 1.4% (-4.6% y/y). Nonalcoholic beverage prices rebounded 0.4% (0.6% y/y) after falling 0.2%.

The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

Consumer Price Index, All Urban Consumers (% chg) Jan Dec Nov Jan Y/Y 2019 2018 2017
Total 0.1 0.2 0.2 2.5 1.8 2.4 2.1
Total less Food & Energy 0.2 0.1 0.2 2.3 2.2 2.1 1.8
  Goods less Food & Energy -0.0 -0.0 -0.1 -0.3 0.2 -0.2 -0.7
  Services less Energy 0.3 0.2 0.3 3.1 2.8 2.9 2.7
 Food 0.2 0.2 0.1 1.8 1.9 1.4 0.9
 Energy -0.7 1.6 0.8 6.2 -2.1 7.5 7.9
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