WASHINGTON — U.S. consumer prices rose 0.3% in January, led by a surge in energy. Though the gain was the biggest monthly increase since July, inflation in the past year remains modest.
The rise in consumer prices followed 0.2% gains in both November and December, the Labor Department reported today, and last month’s hike was the sharpest since prices rose 0.5% in July, a month when the country was re-opening following the coronavirus lockdowns in the spring.
During the past year, inflation is up a modest 1.4%. Core inflation, which excludes volatile food and energy costs, is also up 1.4% with core prices unchanged in January.
Energy costs jumped 3.5%, led by a 7.4% surge in gasoline. Even with the spike, gasoline prices are 8.7% below where they were a year ago.
Food costs posted a modest 0.1% rise in January are are up 3.8% over the past 12 months.
The absence of inflation pressures has allowed the Federal Reserve to slash its benchmark interest rate to a record-tying low of 0 to 0.25 in an effort to help lift the economy out of the pandemic-induced recession.