U.S. CPI Strengthens in January; Core Price Gain Posts Eight-Month High
by:Tom Moeller
|in:Economy in Brief
Summary
- Services prices are strong.
- Goods prices are mixed.
- Food costs pick up; energy price decline continues.
The Consumer Price Index increased 0.3% during January following a 0.2% December gain, revised from 0.3%. A 0.2% rise had been expected in the Action Economics Forecast Survey. The 3.1% y/y rise remained below the peak 9.1% y/y increase in June of 2022. Prices excluding food & energy rose 0.4% last month, up from an unrevised 0.3% December rise. A 0.3% increase had been expected. The steady 3.9% y/y increase remained below the peak 6.6% y/y gain in September 2022.
The CPI less food, energy and shelter, another measure of core pricing power, rose 0.2% for the fourth consecutive month. The 2.2% y/y increase was increased from the 2.0% y/y October low, but remained below the 7.6% y/y peak in February 2022.
Food prices rose 0.4% (2.6% y/y) in January following two months of 0.2% increase. Egg prices jumped 3.4% (-28.6% y/y) after strengthening 3.7% in December. Meat, poultry & fish prices declined 0.2% (+2.1% y/y) after rising 0.1% in December, while cereal & bakery product prices fell 0.2% (+1.5% y/y) after easing 0.1%. Fruit & vegetable prices improved 0.4% (1.1% y/y) after holding steady in December, while dairy prices improved 0.2% (-1.1% y/y) after a 0.1% December gain. Nonalcoholic beverage prices rose 1.2% (3.4% y/y) after a 0.2% increase.
Energy prices declined 0.9% (-4.6%), the fourth straight month of decline. Gasoline prices fell 3.3%, the fourth consecutive month of decline, and were down 6.4% y/y. Amongst other energy products, fuel oil prices weakened 2.3% (-10.5% y/y) after falling 2.5%. Electricity prices rose 1.2% (3.8% y/y) after rising 0.6% in December while natural gas prices strengthened 2.0% (-17.8% y/y) after easing 0.6%.
Service costs less energy increased 0.7% in January (5.4% y/y) following a 0.4% gain. Transportation services costs rose 1.0% (9.5% y/y) after edging 0.1% higher in December. The cost of shelter rose 0.6% (6.0% y/y) after a 0.4% increase as owners’ equivalent rent of primary residences increased 0.6% (6.2% y/y) after a 0.4% gain. Rents of primary residences rose 0.4% (6.1% y/y) for the third straight month. Lodging away from home rose 1.8% (1.0% y/y) after a 0.2% rise. Education & communication prices moved 0.4% higher (1.3% y/y) after a 0.2% increase. Recreation service prices rose 0.4% (5.3% y/y) following a 1.1% rise, and medical care service costs rose 0.7% (0.6% y/y) after two straight months of 0.5% increase.
In January, the CPI for goods less food & energy fell 0.3% both m/m and y/y, after two months of modest decline. Education & communication goods costs rose 0.6% (-6.6% y/y) after falling for three straight months. Recreation product prices increased 0.8% (-0.6% y/y) after falling 0.5%. Home furnishings prices eased 0.1% (-1.3% y/y) after a 0.3% decline, while appliance costs rose 0.9% (-3.9% y/y) after five straight months of decline. Apparel prices fell 0.7% (+0.1% y/y) after holding steady in December and new vehicle prices also were unchanged (+0.7% y/y) after a 0.2% rise. Used car & truck prices weakened 3.4% (-3.5% y/y) after a 0.6% gain.
The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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