January 2019 Consumer Price Index

Prices paid by Americans were unchanged in January 2019 according to the Bureau of Labor Statistics’ Consumer Price Index (CPI).  This comprehensive look at inflation gained just 1.6 percent in the past twelve months.  Stripping out food and energy, the “core” CPI tally gained 0.2 percent to start the year and 2.2 percent on a year-over-year basis. 

Another month of plummeting energy prices kept the headline tally from rising.  All major energy components fell in the period, causing the energy index to drop for the third consecutive month.   Gasoline crashed 5.5 percent after a 5.8 percent drop to end last year and fell 10.1 percent in the past 12 months.  Fuel oil was off 1.3 percent after a free fall of 9.4 percent in December and ended the year off 8.1 percent.

Prices in other areas of the economy weren’t as weak in the period.  For instance, apparel rose 1.1 percent after going unchanged in December.  New vehicle prices gained 0.4 percent but are only up 0.3 percent in the past year.  Used cars and trucks ticked up 0.1 percent and were 1.6 percent more expensive than 12 months earlier.  Finally, shelter continued its steady climb, rising 0.3 percent matching the upticks in the prior two months.

Generally speaking, inflation is in line with the Federal Reserve’s target.  They are trying to keep inflation’s trend at about 2.0 percent.  The core measure of CPI is just a tad above their target this go around.  There isn’t anything in this release to suggest to Atlas that the Federal Reserve will need to make hasty increases in their interest rate targeting.