BCN-32 Cheap energy sends US inflation to 19-month low
Cheap energy sends US inflation to 19-month low
WASHINGTON, Feb 13, 2019 (BSS/AFP) – Falling gasoline prices put the brakes
on US consumer inflation in January which hit the slowest pace in 19 months,
the government reported Wednesday, easing already mild pressures on
Energy prices saw their biggest drop in almost three years.
While costs for shelter, clothing, medical care and home furnishings all
rose, the sluggish overall price gains will remove pressure on the Federal
Reserve to resume raising interest rates — likely a relief to investors.
The Consumer Price Index, which tracks costs to households for goods and
services, was flat in for the third month in a row, according to the Labor
Department, undershooting economists’ forecasts.
Compared to January of last year, CPI gained 1.6 percent, slowing for the
fourth month in a row and the smallest increase since June 2017.
Energy was the primary drag on prices, posting the largest month-to-month
decrease since February 2016. Gasoline prices fell 5.5 percent.
But food, including soft drinks, rose as carbonated sodas saw their biggest
annual price gains in eight years.
When the volatile food and fuel categories were stripped out, the “core”
inflation index was stronger but still relatively tame.
Core CPI rose 0.2 percent for January — the fifth straight month at that
level, which matched analyst expectations.
Compared to the same month of 2018, the core index rose 2.2 percent, the
same change as in November and December.
In a separate data release, the Labor Department also reported that
inflation-adjusted wage gains in January slowed, rising 0.2 percent, half the
increase recorded in December.