Feb. 22, 2013 – Year-over-year core inflation has remained at or below 2 percent since August, indicating the Federal Reserve has ample room to continue its current policy of historically low interest rates, NAFCU Research Assistant Doug Christman said Thursday.
Christman made the observation following the release of January’s consumer price index data. Overall CPI was unchanged in January on a seasonally adjusted basis, making it the third consecutive month without an increase. “Declining prices in the energy market were the main cause, resulting from declines in gasoline and natural gas prices,” Christman noted.
Core inflation, which excludes the volatile energy and food markets, rose 0.3 percent from the previous month and 1.9 percent from the previous year.
Year over year, overall CPI growth was 1.6 percent, slower than its 1.8 percent pace in December. On a year-over-year basis, energy prices were down 1 percent, and food prices were up 1.6 percent.
Christman said gasoline prices have been rising over the last several weeks. “That should show up in February’s energy index,” he said.