Surging fuel and medical costs ramped up the annual inflation rate Americans faced in January to its highest in more than a year, the government reported Thursday.
Consumers saw tepid price increases in the first month of the year compared to December, a rise of just 0.1 percent, seasonally adjusted, according to the Labor Department’s monthly report.
But for the latest 12 months, the Consumer Price Index jumped to 2.5 percent, without seasonal adjustment, the fastest gain since October 2018 and the second consecutive month that record was broken.
The double-digit surge in fuel prices over the past 12 months was a major driver, but medical costs gained 5.1 percent in the year ended in January, while housing rose 3.3 percent, the report said.
However, last month energy prices fell 1.6 percent from December as the new coronavirus outbreak in China took a bite out of the world’s second largest economy, dampening demand for energy and trimming global oil prices.
When volatile food and fuel categories are excluded, “core” CPI rose 0.2 percent compared to December, and 2.3 percent from January 2019.
Even with the gain in CPI for the year, the mystery of long-absent price pressures remains, and inflation has barely made it beyond the Federal Reserve’s two percent goal, even with more than a decade of economic growth and a strong job market that pushed the unemployment rate to a 50-year low.