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MNI DATA IMPACT: US January CPI +0.1%; Core Up +0.2%>

--CPI +2.5% yoy; Core CPI +2.3% yoy 
--Energy -0.7%; Food +0.2%
By Ryan Hauser
     WASHINGTON (MNI) - The Consumer Price Index for January increased 
by 0.1%, according to a Bureau of Labor Statistics report released this 
morning. The increase came in below market expactions of a 0.2% increase 
and is a deceleration from December's 0.2% rise. Core inflation met 
market expections, increasing by 0.2%. 
     The seasonally adjusted CPI all items index rose by 2.5% 
year-over-year for January 2020, the largest 12-month increase since   
October 2018. However, the core CPI increased by 2.3% year-over-year,  
the same 12-month rise seen over the last 3 months. 
     Here are some of the key takeaways: 
     - Energy prices fell 0.7%, driven by a decrease in the gasoline 
index, which fell by 1.6%, driven by a negative demand shock attributed 
to the emerging coronavirus outbreak. The price of a barrel of oil has 
already dropped 21% (as of Feb 11) amid a drop-off in global travel and 
a decline in Chinese consumer demand. The trend could worse in February 
as the rate of infections continued to rise above expectations. CPI 
excluding energy was 0.2%. 
     - Food prices rose 0.2% with dining out prices rising a strong 0.4% 
in January. CPI excluding food was 0.1%. 
     - Shelter prices rose 0.4%, driving the rise in CPI, with 
the large owners' equivalent rent category rising 0.3%. 
     - Medical care index rose 0.2% with medical services rising 0.3%. 
However, prescription drug prices fell by 0.4% in the month. 
     - Other gains came from apparel, which added 0.7% in the month, 
transportation services, up 0.3%. Recreation, education and airline 
fares also increased. Offsetting those gains were used cars and trucks, 
falling 1.2%, and prescription drug prices. 
     - The lower-than-expected rise in CPI will probably reinforce the 
Federal Reserve's overshoot strategy with the US central bank's dovish 
stance on inflation likely to hold for the near-term.                                                    
     ** MNI Washington Bureau: 202-371-2121 ** 
[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$] 

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