Consumer Price Index Still Up After Pandemic Slump

Consumer price index, bureau of labor statistics, january 2021, spending

The cost of U.S. consumer goods and services went up again in January, as inflation remained largely unwavering. The January Consumer Price Index (CPI), which was released on Wednesday (Feb. 10) by the Bureau of Labor Statistics (BLS), went up 0.3 percent after climbing 0.4 percent in December. 

Year-over-year non-seasonally adjusted Headline CPI increased 1.4 percent, up slightly from December’s 1.36 percent gain. Year-over-year Core CPI, excluding food and energy, dropped to 1.41 percent, down from 1.62 percent the previous month and below the Fed’s 2 percent PCE target. Inflation over the past year remained the same, at 1.4 percent. By way of comparison, pre-pandemic, the inflation rate was 2.3 percent.

According to the report, the indexes for everything except food and energy were largely unchanged in January. Apparel, medical care, shelter and motor vehicle insurance went up over the month. The indexes for recreation, used cars and trucks, airline fares and new vehicles all decreased.

The gasoline index went up 7.4 percent in January and is responsible for the majority of the increases. The indexes for electricity and natural gas went down, while the energy index rose 3.5 percent over the month. 

The food away from home index was up 0.3 percent in January, continuing an upward trend for the past several months. The index for limited-service meals rose 0.6 percent, while the index for full-service meals increased 0.3 percent, according to the BLS report.

The food at home index increased 3.7 percent over the past 12 months. Six major grocery stores’ food group indexes increased over the period, with increases ranging from 2.5 percent (cereals and bakery products) to 5.1 percent (meats, poultry, fish and eggs). 

The index for food away from home rose 3.9 percent over the last year. The index for limited-service meals rose 6.2 percent, the largest 12-month increase in the history of the index, which began in 1997. The index for full-service meals rose 2.9 percent over the last 12 months. 

A January study from the Federal Reserve Bank of New York indicated that consumers were expecting to spend more money in 2021, although they weren’t necessarily expecting to make more money. Consumers’ expectations rose to 4.2 percent, the highest in five years.