US Consumer Prices Flat in January For 2nd Month
U.S. consumer prices were flat last month, the latest sign inflation is in check. That could give the Federal Reserve leeway to continue its efforts to stimulate growth.
The consumer price index has risen 1.6 percent in the 12 months ending in January, the Labor Department said Thursday. That’s down from a 2.9 percent pace a year ago.
Excluding the volatile food and energy categories, core prices rose 0.3 percent in January, pushed up by higher costs for clothing, air fares and rents. The price of clothes rose by the most in nearly 18 months.
Core prices have risen 1.9 percent in the past year, below the Fed’s inflation target.
The Fed is purchasing $85 billion in Treasurys and mortgage bonds each month in an effort to keep interest rates low. Last month, some Fed policymakers expressed concern the purchases could cause inflation or disrupt bond markets, according to minutes of the Fed’s Jan. 29-30 meeting released Wednesday.
But private economists see little sign that prices increases are accelerating.
"As long as inflation readings remain relatively constrained and inflation expectations do not get out of control, the (Fed) has plenty of runway to continue its program," Dan Greenhaus, chief global strategist at brokerage BTIG, said in a note to clients.