WASHINGTON – U.S. consumer prices rose in January for the first time in half a year, as gasoline and apparel prices resumed their climb, according to the U.S. Department of Labor’s Bureau of Labor Statistics.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.9 percent last month, after falling 0.8 percent in December and plunging a record 1.7 percent in November (READ MORE). The increase matched the median forecast from a Bloomberg News survey of 71 economists.
Consumer energy costs rose 1.7 percent last month– led by gasoline prices, which increased 6 percent compared with December, ending their three-month decline – but remained 31.4 percent below their July peak, the BLS said. And the food-price index edged up only 0.1 percent, as lower fruit and vegetable costs helped offset increases in other categories.
The core CPI-U excluding food and energy goods rose 0.2 percent – outpacing the 0.1 percent predicted by the Bloomberg survey – after holding steady in December and November. Transportation costs rose 1.3 percent, medical costs rose 0.4 percent, and prices for apparel, education and communication and other services all rose 0.3 percent, the BLS said. But the housing price index was unchanged from December, despite a 0.3 percent increase in rental costs, and recreation cost also were steady.
Compared with a year ago, the CPI-U was “virtually unchanged” at 211.143 points (1982-1984 = 100). Prices excluding food and energy rose 1.7 percent, in its smallest year-over-year gain since March 2004. But the core index’s rise and the 5.3 percent increase in food prices both were offset by a decline in energy prices, which fell 20.4 percent compared with January 2008.
“We’re in the heart of the recession right now, and with demand falling rapidly, we can expect downward pressure on prices,” Chris Rupkey, chief financial economist in New York at Bank of Tokyo-Mitsubishi UFJ Ltd., told Bloomberg News. “Everything is heading in the same direction, which is down. Sales are down, profits are down, prices are coming down.”
Meanwhile, “real” weekly earnings – average weekly earnings adjusted for inflation – fell 0.1 percent compared with December, theBLS said in a separate report. A 0.3 percent increase in average hourly earnings was offset by and a 0.3 percent increase in the cost of living, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Compared with January 2008, earnings before adjustment for inflation, average weekly earnings rose 2.7 percent, to $608.32 from the year-ago $593.07, the BLS said. Real weekly earnings adjusted for the CPI-W’s increase rose 3.4 percent.
Additional information, including the 20-page Consumer Price Index report, is available from the U.S. Department of Labor’s Bureau of Labor Statistics at www.bls.gov/cpi; the five-page Real Earnings report can be found at www.bls.gov/ces .
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