United States Inflation

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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.

FocusEconomics Consensus Forecast participants expect inflation to average 1.3% in 2015, which is down 0.4 percentage points from last month’s forecast. For 2016, the panel expects inflation to average 2.2%.

Author:, Economist

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United States Inflation Chart

USA Inflation January 2015

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Bureau of Labor Statistics.

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