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Consumers don’t have to spend as much on necessities because of low inflation on things like gas and clothes.
WASHINGTON (MarketWatch) — Cheaper gasoline and moderating grocery prices kept inflation in check in January, but expenses for medical care and housing are rising.
The consumer price index was flat last month, the government said Friday. Economists polled by MarketWatch had expected a seasonally adjusted 0.1% decline.
Over the past 12 months the main CPI has risen by an unadjusted 1.4%, double the rate in December. That’s the fastest pace since late 2014.
Core prices are up 2.2% in the same span, the biggest increase since the summer of 2012.
Energy prices fell 2.8% in January, led by another drop in gasoline. Fueling up is cheaper than it has been in years, with gas costing less than $2 a gallon in many parts of the country.
Food prices were unchanged in January as the cost of most staples fell, the Labor Department said. The cost of groceries is rising at a much slower rate after spiking in late 2014 and early 2015.
Yet excluding food and energy, so-called core consumer prices jumped 0.3% to mark the biggest gain since August 2011.
Higher medical care and housing expenses, the two largest costs for many Americans, were behind the increase.
The cost of medical care jumped 0.5% in January and it’s risen 3.3% in the past 12 months, the highest rate in three years.
The cost of shelter — owning a home or renting an apartment — has climbed 3.2% in the past year. And rental costs are rising at the fastest pace since 2007.
Although inflation is still quite low, pressure is beginning to build and that’s likely to continue as gasoline prices stabilize. A huge plunge in oil last year drove inflation to fresh post-recession lows.
Real or inflation-adjusted hourly wages, meanwhile, rose 0.4% in January. They have increased by a mediocre 1.1% in the past 12 months.
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