US Consumer Prices Rise in January

Consumer prices rose in January as unseasonably cold weather boosted demand for electricity and heating fuel, but inflation pressures remained muted.

The Labor Department said on Thursday its Consumer Price Index edged up 0.1 percent, with increases in the cost of household energy accounting for most of the increase.

The CPI had risen 0.2 percent in December and last month’s gain was in line with economists’ expectations.

In the 12 months to January, consumer prices advanced 1.6 percent after increasing 1.5 percent in December.

Stripping out the volatile energy and food components, the so-called core CPI also rose 0.1 percent for a second straight month. In the 12 months to January, core CPI rose 1.6 percent, slowing from a 1.7 percent increase in December and the smallest rise since June.

With consumer inflation continuing to run below the Federal Reserve’s 2 percent target, monetary policy is likely to remain accommodative for a while even as the U.S. central bank reduces the amount of money it is injecting into the economy each month.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza