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$]