REPEAT:MNI DATA ANALYSIS:US January CPI Up 0.5%, Core Up 0.3%>

Repeats Story Initially Transmitted at 13:30 GMT Feb 14/08:30 EST Feb 14

--Overall CPI Stays At 2.1% Y/Y, Core CPI Still +1.8% Y/Y

--Retail Sales Fall 0.3% In January Vs +0.2% Expected; Ex-MV Flat

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The January CPI and retail sales data suggested 

inflation remained solid while consumption weakened, with overall CPI up 

0.5% and headline retail sales down 0.3% and flat excluding a motor 

vehicle plunge, well below analysts expectations, data released 

Wednesday morning showed. 

--CONSUMER PRICES ABOVE EXPECTATIONS, CORE FIRMER

     Core CPI posted a stronger-than-expected 0.5% rise compared with 

the 0.3% gain expected, while core CPI was up 0.3%, stronger than the 

0.2% rise expected. 

     Unrounded, the month/month rise for overall CPI was +0.53850%, on 

the high side of a 0.5% gain. The unrounded increase for core CPI was 

+0.34945%, very close to being rounded up to a 0.4% rise. 

     Forecasts tend to be fairly accurate for CPI, though the previous 

three January releases have been underestimated for the core, so today's 

data goes against that trend. 

--YEAR/YEAR PRICES HOLD STEADY

     Overall, the data points to contained core consumer inflation, with 

the year/year rate remaining well below the 2% threshold, but it is 

creeping up closer to that point, as the skittish financial markets 

pay close attention. 

     The year/year rate for overall CPI remained at 2.1% and the 

year/year rate for core CPI stayed at 1.8%, but both had been expected 

to slow, so markets will see this as another data point pushing the FOMC 

toward a March rate hike.

     Within core CPI, owners equivalent rents rose 0.3% for the third 

time in the last four months, while apparel prices jumped 1.7% after a 

string of declines. 

     Energy prices rose by 3.0% in the month, with a 5.7% jump in 

gasoline prices adding to a 9.5% surge in fuel oil prices. Excluding 

only energy prices, the January CPI would have been up 0.3%. 

     Food prices were up 0.2% in January, with food at home up 0.1% and 

food away from home up 0.4%. 

--RETAIL SALES WEAKER THAN EXPECTED

     In other data released Wednesday, the value of retail sales fell 

0.3% in January, well below the small gain expected by analysts. Sales 

were flat excluding motor vehicle sales, also much weaker than expected. 

In addition, there were downward revisions to sales in both November and 

December. 

     Excluding autos, gasoline, and building materials, "control" retail 

sales were flat. And for good measure, excluding food services as 

well as those three measures, retail sales were also flat, suggesting 

underlying sales growth was tame, with offsetting component movements. 

     January motor vehicle sales posted a 1.3% decline after slipping 

0.1% in the previous month. At the same time, building materials sales 

fell 2.4% in January. 

     Gasoline store sales were up 1.6% in January following a 0.3% 

increase in December and food services and drinking places sales were 

flat after a 0.9% December gain. 

     The retail sales data suggest that overall first quarter 

consumption is virtually unchanged from the fourth quarter average, a 

negative for first quarter PCE. 

     Incorporating the revisions to November and December, first quarter 

sales were flat at an annual rate, while sales excluding motor vehicles 

were up only 1.8% from the fourth quarter. Sales excluding autos, gas 

and building materials were up 1.5% and sales also excluding food 

services were up 1.2%. 

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