The Economy

Core U.S. Consumer Prices Rise 0.3%

The prices of medical care, rentals, apparel, and motor vehicles boosted consumer prices in January.
Katie Kuehner-HebertFebruary 19, 2016

Companies are getting a boost in their pricing power, as much of the country’s consumer prices rose in January at by the most in more than four years.

The Labor Department’s core consumer price index (which excludes food and fuel) rose 0.3% over the previous month, more than forecast and the most since August 2011, after a 0.2% month-to-month gain the month before. The overall consumer price index was unchanged, due to continued depressed energy prices. Over the last 12 months, the core CPI rose 2.2%, while the overall CPI rose 1.4%.

“A tightening labor market and nascent signs of wage growth bode well for domestic demand, a rebound in which could help stoke inflation if energy costs stabilize,” Bloomberg wrote. “The increase in inflation will likely hearten Federal Reserve policy makers, who are monitoring the U.S. economy’s durability against headwinds such as stock-market turmoil and weaker foreign markets.”

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Total consumer prices were expected to drop 0.1% in January from the month before based on the median of 82 economists in a Bloomberg survey.

Pushing up the CPI in January were rentals (an increase of 0.3%), medical care (0.5%), hospital costs (0.4%), apparel (0.6%), and motor vehicles (0.3%).

Featured image: Thinkstock