Households Face Rising Prices Outside of Food, Fuel

CLICK ON TABLE TO ENLARGE

Food and fuel prices continue to fall, but households faced higher prices across a range of other categories in January, according to a first look at the latest U.S. consumer price numbers.

Autos, apparel, rent, medical care, prescription drugs, and recreational services were the categories showing a significant pickup in prices in January from the prior month.

• These price increases pushed consumer price inflation up to 2.2% on a year-to-year basis for core prices excluding food and energy. It was the third straight month in which core inflation edged higher.
• Prices for food at home declined for a third-straight month on a month-to-month basis and now are 0.5% lower than a year ago.
• Lower prices for food and fuel are the reason why overall consumer price inflation remains under control. Overall CPI in January was flat month-to-month and up 1.3% from the prior year.

See the table summary for more detail.

Impact @Work: Households appear to be using the cost savings in food and fuel to offset the higher prices in other categories—or they are otherwise banking the savings for a rainy day. This is a major reason why spending on retail goods is not benefiting from declining fuel prices.