United States: Consumer prices drop into deflationary territory for first time since 2009
February 27, 2015
In January, consumer prices decreased 0.7% over the previous month in seasonally-adjusted terms, which marked the biggest decline in more than six years. The print, which was just below the 0.6% decline expected by the market, followed the 0.3% drop recorded in December. January’s reading was driven by a steep drop in energy prices, including gasoline.
Annual consumer prices slumped from a 0.8% increase in December to a 0.1% decline in January. Consumer prices had not been in deflationary territory since October 2009. Meanwhile, core consumer prices, which exclude food and energy prices, increased 0.2% over the previous month, which was up slightly from the 0.1% increase observed in December. The figure was just above market expectations of another 0.1% increase. Annual average core inflation ticked up from December’s 1.7% to 1.8% in January.
Author: Carl Kelly, Economist