Washington, D.C., USA: Consumer prices in the U.S. were unchanged for the third straight month in January, according to a report released by the Labor Department on Wednesday.
The Labor Department said its consumer price index was unchanged in January, matching the revised reading for December. Economists had expected consumer prices to inch up by 0.1 percent.
The unchanged reading on consumer prices came as another steep drop in energy prices was offset by increases in prices for other goods and services.
The report said energy prices plummeted by 3.1 percent in January after tumbling by 2.6 percent in December and 2.8 percent in November.
Prices for gasoline continued to lead the way lower, plunging by 5.5 percent in January following a 5.8 percent nosedive in December.
Excluding the slump in energy prices as well as a modest increase in food prices, core consumer prices rose by 0.2 percent for the fifth consecutive month. The uptick in core prices matched economist estimates.
The report showed a substantial increase in prices for apparel, which spiked by 1.1 percent in January after coming in unchanged in December.
Higher prices for shelter, medical care, recreation, and household furnishings and operations also contributed to the continued increase in core prices.
The Labor Department said the annual rate of consume price growth slowed to 1.6 percent in January from 1.9 percent in December, showing the slowest rate of growth since June of 2017.
Meanwhile, the report said the annual rate of core consumer price growth was unchanged from the two previous months at 2.2 percent.
“Overall, these data support our baseline view of a well-behaved inflationary environment that provides the Fed room to pause before raising rates again,” said Gregory Daco, Chief U.S. Economist at Oxford Economics.
He added, “We look for the Fed to pause throughout the first half of the year to assess the economic landscape before likely raising rates again in Q3.”
On Thursday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of January.
Producer prices are expected to inch up by 0.1 percent, while core producer prices are expected to rise by 0.2 percent.
The CPI is the broadest of three price gauges from the Labor Department because it includes all goods and services. About 60 percent of the index covers the prices that consumers pay for services ranging from medical visits to airline fares, movie tickets and rents.
Labor Department economic releases are proceeding as scheduled, as the agency isn’t part of the partial federal- government shutdown.
Consumer Price Index (CPI)
The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents about 93 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers.
Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farming families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals.
Consumer inflation for all urban consumers is measured by two indexes, namely, the Consumer Price Index for All Urban Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on the expenditures of households included in the CPI-U definition that meet two requirements: more than one half of the household’s income must come from clerical or wage occupations, and at least one of the household’s earners must have been employed for at least 37 weeks during the previous 12 months.
The CPI-W population represents about 29 percent of the total U.S. population and is a subset of the CPI-U population.
The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected each month in 75 urban areas across the country from about 5,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments).
All taxes directly associated with the purchase and use of items are included in the index. Prices of fuels and a few other items are obtained every month in all 75 locations.
Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits or telephone calls by the Bureau’s trained representatives.