MNI DATA ANALYSIS: US January CPI Flat, Core Up 0.2%>

--Overall CPI Slows To +1.6% Y/Y, Core Remains At +2.2% Y/Y 

By Shikha Dave, and Harrison Clarke

     WASHINGTON (MNI) - The CPI data suggest that consumer inflation was 

steady in January, with the headline measure below expectations, the 

core measure in line with expectations, and the year/year rate for the 

overall measure at 1.6%, down from 1.9% in December, data released 

Wednesday morning by the Bureau of Labor Statistics showed. 

     Overall CPI posted a flat reading, below analysts' expectations for 

a 0.1% increase in the month, but as expected by market participants. 

The core CPI rose 0.2%, matching expectations for a 0.2% increase. MNI 

analysis showed a tendency by analysts to slightly underestimate overall 

CPI, but to correctly estimate core CPI. This month's data parts with 

that trend. 

     Unrounded, the month/month decline for overall CPI was down 0.020%, 

putting the value on the low side of the flat reading, and the unrounded 

increase for core CPI was 0.240%, on the high side of the 0.2% increase. 

--OVERALL YEAR/YEAR PRICES DECELERATE 

     Overall, the data point to slowing consumer inflation, as the 

year/year rate for the overall measure fell to 1.6% from 1.9% in 

December, the lowest since June 2017. A large gain in January 2018 

accounts for much of year/year decline and should be reversed next 

month. 

     The year/year rate for core CPI remained at 2.2%, the same as in 

the previous month. CPI excluding only energy was up 2.1% year/year, 

showing the impact of soft energy prices.  

--OWNERS EQUIVALENT RENTS RISE, TELECOM SERVICES DOWN SLIGHTLY 

     The large owners' equivalent rents category rose 0.3% and medical 

care was up 0.2%. Additionally, new vehicle prices were up 0.2% and 

apparel prices rose 1.1%. 

     CPI prices for wireless telephone services fell 0.1%, reflecting 

new quality adjustments to keep up with rapid changes in technology. 

     Energy prices fell by 3.1% in the month after a 2.6% decline in 

December. Gasoline prices declined 5.5% and fuel oil prices fell 1.3%. 

Electricity prices were down 0.6% and gas utilities prices were also 

down 0.3%. CPI excluding only energy was up 0.2%. 

     In the statement following their January 31-February meeting, the 

FOMC noted a recent slowdown in measures of inflation compensation, but 

said that longer-term inflation expectations were little changed. 

     Food prices rose 0.2% in January, with food at home prices rising 

0.1% and food away from home prices rising 0.3%. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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