December Consumer Prices

The Bureau of Labor Statistics’ Consumer Price Index was largely flat as 2013 came to a close. The monthly uptick was 0.3 percent. For the year, the CPI was 1.5 percent higher. By this measure, inflation is hardly becoming a problem for the economy or the central bank.

Most of the uptick can be blamed on energy. This volatile component jumped 2.1 percent in the period. Gasoline led the increase with a 3.1 percent jump in price. Those suffering from the cold weather were also hit with a 2.4 percent increase in fuel oil cost. For those lucky enough to warm the home by burning natural gas, the cost fell by 0.4 percent.

The rest of the consumer prices were mildly higher as the year came to a close. Core CPI (this measure removes food and energy) ticked up just 0.1 percent for the month. New vehicles were flat, while their used counterparts dropped in price. Shelter was slightly higher, up 0.2 percent. Even the volatile food component was only 0.1 percent higher. Food at home was unchanged for the second month in a row, and eating away from home was just 0.1 percent higher in December.

Consumer prices are showing no dramatic signs of inflation per the CPI. Producer prices are demonstrating a similar phenomenon. At this point it time, it is tough to draw any conclusions about price pressures other than to say they are currently tame. As the economy picks up momentum, this may change, but there is scant evidence of accelerating inflation for now. (by C. Cox)