US Inflation Rate Higher than Expected

Consumer prices in the United States increased 2.1 percent year-on-year in January of 2018, the same as in December and above market expectations of 1.9 percent. A slowdown in gasoline and electricity prices was offset by higher cost of food and medical care services. The monthly inflation rate went up to 0.5 percent from 0.2 percent amid broad-based cost increases.

Year-on-year, prices rose faster for fuel oil (12.5 percent from 15.2 percent); transportation services (4 percent from 3.7 percent); medical care services (2 percent from 1.6 percent); and food (1.7 percent from 1.6 percent). In contrast, the cost of energy grew less (5.5 percent from 6.9 percent in December), namely gasoline (8.5 percent from 10.7 percent); electricity (2.4 percent from 2.6 percent); utility piped gas service (0.2 percent from 4.7 percent); and medical care commodities (1.8 percent from 2.3 percent). Also, cost continued to decline for apparel (-0.7 percent from -1.6 percent); new vehicles (-1.2 percent from -0.5 percent); and used cars and trucks (-0.6 percent from -1 percent). On the other hand, inflation was steady for shelter (3.2 percent).

Excluding food and energy, annual inflation was flat at 1.8 percent, higher than expectations of 1.7 percent.

On a monthly basis, consumer prices went up 0.5 percent, following a 0.2 percent increase in December and above forecasts of 0.3 percent. Increases were broad-based, with prices of gasoline, shelter, apparel, medical care, and food all contributing. The energy index rose 3 percent, with the increase in the gasoline index more than offsetting declines in other energy component indexes. The food index rose 0.2 percent with the indexes for food at home and food away from home both rising.

Excluding food and energy, prices went up 0.3 percent. Along with shelter, apparel, and medical care, the indexes for motor vehicle insurance, personal care, and used cars and trucks also rose in January. The indexes for airline fares and new vehicles were among those that declined over the month.    .

US Inflation Rate Higher than Expected

BLS | Joana Taborda |
2/14/2018 1:58:27 PM