Newsroom
February 26, 2015
Low gas prices drive 0.7% decline in CPI
A continued decline in the gasoline index contributed to a seasonally adjusted consumer price index decline of 0.7 percent in January, NAFCU Chief Economist and Director of Research Curt Long said Thursday.
"With falling energy prices and weakness abroad, it is looking unlikely that core inflation will be at or even near the Fed's target by the time policymakers are ready to begin normalizing rates," Long added in a NAFCU Macro Data Flash report. "Nevertheless, they will want to see some progress made prior to any interest-rate increases."
Data from the Bureau of Labor Statistics shows overall CPI growth hit a negative 0.2 percent in the previous 12-month period. In December, CPI grew 0.7 percent.
Core prices (excluding food and energy costs) had no significant change from December to January. Year-over-year core CPI grew 1.6 percent, highlighting the impact of energy prices on headline CPI.
Core personal consumption expenditure inflation, the Federal Reserve's preferred measure, fell to 1.3 percent year-over-year growth in December and is still well below the Fed's 2 percent target.
Energy prices decreased by 9.7 percent in January, following a 4.7 percent decrease in December. From a year ago, energy prices were down 20 percent. Food-price growth was flat in January following an increase of 0.2 percent in December, and was up 3.2 percent on a year-over-year basis.
"With falling energy prices and weakness abroad, it is looking unlikely that core inflation will be at or even near the Fed's target by the time policymakers are ready to begin normalizing rates," Long added in a NAFCU Macro Data Flash report. "Nevertheless, they will want to see some progress made prior to any interest-rate increases."
Data from the Bureau of Labor Statistics shows overall CPI growth hit a negative 0.2 percent in the previous 12-month period. In December, CPI grew 0.7 percent.
Core prices (excluding food and energy costs) had no significant change from December to January. Year-over-year core CPI grew 1.6 percent, highlighting the impact of energy prices on headline CPI.
Core personal consumption expenditure inflation, the Federal Reserve's preferred measure, fell to 1.3 percent year-over-year growth in December and is still well below the Fed's 2 percent target.
Energy prices decreased by 9.7 percent in January, following a 4.7 percent decrease in December. From a year ago, energy prices were down 20 percent. Food-price growth was flat in January following an increase of 0.2 percent in December, and was up 3.2 percent on a year-over-year basis.
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