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Economy in Brief

U.S. Consumer Price Inflation Picks Up in January; Core Prices Stabilize
by Tom Moeller  February 10, 2021

• Higher energy prices fuel last month's increase.

• Services prices remain unchanged for a second straight month.

• Goods price inflation is minimal.

The Consumer Price Index rose 0.3% (1.4% y/y) during January following a 0.2% December increase, revised from 0.4%. The gain matched expectations in the Action Economics Forecast Survey. The CPI excluding food & energy held steady last month (1.4% y/y) as it did in December, revised down from 0.1%. A 0.2% January gain had been expected.

A 3.5% increase (-3.6% y/y) in energy product prices provided the lift to last month's CPI gain, following December's 2.6% rise, revised from 4.0%. Gasoline prices surged 7.4% (-8.6% y/y) after strengthening 5.2%. Fuel oil prices strengthened 5.4% (-16.5% y/y) following a 10.2% jump. The cost of electricity eased 0.2% (+1.5% y/y) while natural gas prices fell 0.4% (+4.3% y/y) for the second consecutive month.

Food prices edged 0.1% higher (3.8% y/y) last month, after rising 0.3% in December, revised from 0.4%. Food-at-home prices slipped 0.1% (+3.7% y/y). The cost of nonalcoholic beverages rose 0.1% (4.3% y/y). Dairy prices fell 0.4% (3.8% y/y) while cereal & bakery product costs declined 0.8% (+2.5% y/y). Fruit & vegetable prices eased 0.2% (+2.7% y/y) for a second month. Working higher were meat, poultry & fish prices which increased 0.5% (5.4% y/y) while egg prices improved 1.1% (0.8% y/y). Nonalcoholic beverages prices gained 0.1% (4.3% y/y). Prices for food away-from-home rose 0.3% (3.9% y/y).

Goods prices excluding food & energy edged up 0.1% in January (1.7% y/y) for a second consecutive month. Apparel prices surged 2.2% (-2.5% y/y) after gaining 0.9% in December, revised from 1.4%. Sporting goods prices rose 0.7% (2.8% y/y), about the same as during each of the prior three months. Recreation product prices improved 0.1% (-0.2% y/y). Declining were prices for education & communication goods which fell 0.6% (-1.9% y/y) following two moderate increases. New vehicle prices declined 0.5% (1.4% y/y). Used car & truck prices fell 0.9% (+10.0% y/y), the third consecutive monthly decline. Medical care product costs slipped 0.1% (-2.3% y/y), the fifth decline in the last six months. Household furnishings prices weakened 0.5% last month (+2.4% y/y) after holding steady in December. Household appliance prices weakened 1.1% (+5.7% y/y) after holding steady in December.

Services prices held steady for a second straight month (1.3% y/y). December was revised from a 0.1% rise. Shelter costs rose 0.1% for the sixth straight month and by a greatly lessened 1.6% y/y. The owners' equivalent rent of primary residences also rose 0.1% and gained 2.0% y/y. Education & communication services prices held steady (2.0% y/y). Falling by 1.0% (+0.3% y/y) were recreation services prices which followed a 0.5% drop. The cost of public transportation fell 1.7% (-13.9% y/y). Medical care services prices improved 0.5% (2.9% y/y) following three straight months of decline.

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 2020 2019 2018
Total 0.3 0.2 0.2 1.4 1.2 1.8 2.4
Total less Food & Energy 0.0 0.0 0.2 1.4 1.7 2.2 2.1
  Goods less Food & Energy 0.1 0.1 0.0 1.7 0.1 0.2 -0.2
  Services less Energy 0.0 0.0 0.2 1.3 2.2 2.8 2.9
 Food 0.1 0.3 -0.0 3.8 3.4 1.9 1.4
 Energy 3.5 2.6 0.7 -3.6 -8.5 -2.1 7.5
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