• Home
• /
• Business

US January inflation up 0.3 pct, flat on annual basis

The Labor Department said its consumer price index (CPI) rose 0.3 percent in January, matching analysts’ consensus forecast, after falling 0.8 percent in December.

The CPI headline number had fallen in the prior three months and was unchanged in August and September. The last time it climbed was in July, by 0.7 percent, when crude oil prices hit all-time highs.

On an annual basis, there was no change from the January 2008 CPI, the weakest reading since August 1955, the department said.

In 2008, December annual inflation rose a meager 0.1 percent after reaching the year’s peak at 5.6 percent in July.

Core CPI, which strips out volatile food and energy prices, rose 0.2 percent in January from December, slightly higher than the 0.1 percent increase expected. On a 12-month basis, core inflation was up 0.9 percent.

Core inflation in December had been unchanged from November.

The rise in consumer prices was led by increases in energy prices, which climbed 1.7 percent in January after falling 9.3 percent in December. Energy prices were a hefty 20.4 percent lower from a year ago.

Gasoline prices surged 6.0 percent from December, but were 40.4 percent lower than in January 2008.

Consumer food prices edged up 0.1 percent on a monthly basis and were 5.2 percent higher than a year ago.

Analysts dismissed the monthly rise in inflation, saying prices seemed to be trending downward.

“Disinflationary pressures slowed down with the modest rebound in energy prices. However, inflation should continue to decrease in the coming months, turning negative for most of 2009,” said Elsa Dargent, an analyst at Natixis.

Ian Shepherdson, chief US economist at High Frequency Economics, also saw prices continuing to fall as the economy sinks into its second year of recession.

“Disinflation pressure is still intense and will stay that way for some time,” Shepherdson said. Disinflation is a decrease in the inflation rate.

On Thursday, the Labor Department reported US wholesale prices rose 0.8 percent in January after five months of decline, driven by higher energy prices.

But on an annual basis, the pipeline inflation number fell 1.0 percent from January 2008, after declining 0.9 percent in December.

The Labor Department separately reported Friday that weekly salaries fell 0.1 percent in January from December but had climbed 3.4 percent from January 2008.