by Mish

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.5 percent before seasonal adjustment. The January increase was the largest seasonally adjusted all items increase since February 2013. A sharp rise in the gasoline index accounted for nearly half the increase, and advances in the indexes for shelter, apparel, and new vehicles also were major contributors.

The energy index increased 4.0 percent in January as the gasoline index advanced 7.8 percent and the index for natural gas also increased. The food index, which had been unchanged for 6 consecutive months, increased 0.1 percent. The food at home index was unchanged, while the index for food away from home rose 0.4 percent.

The index for all items less food and energy rose 0.3 percent in January. Most of the major component indexes increased in January, with the indexes for apparel, new vehicles, motor vehicle insurance, and airline fares all rising 0.8 percent or more. The shelter index rose 0.2 percent, a smaller increase than in recent months.

The all items index rose 2.5 percent for the 12 months ending January, the largest 12-month increase since March 2012. The index for all items less food and energy rose 2.3 percent over the last 12 months, and the energy index increased 10.8 percent, its largest 12-month increase since November 2011. In contrast, the food index declined 0.2 percent over the last 12 months."

Crude Daily Chart

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Ther above images better explains what is going on. On a daily chart, crude bottomed in August and prices have been on the rise since then.

Unlike the Fed, I do not discount food and energy. People have to eat, and people need transportation. The question is whether or not the trend is sustainable.

And given energy was flat in January, the jump seems outsized.

CPI Details

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Did Gasoline prices rise 7.8% in January? Let’s download data from the US Energy Information Agency (EIA) and take a look.

Weekly Gas Prices

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The above graph shows actual prices paid at the pump, not seasonally adjusted. The big jump in price actually occurred in December. Prices in January declined 4.1%.

That’s one hell of a seasonal adjustment in December and January!

Inquiring minds may also wish to investigate PPI Spikes 0.6% in January, Largest Jump in 20 Months: Start of Inflation Run? Will February Repeat?

Mike “Mish” Shedlock

PPI Spikes 0.6% in January, Largest Jump in 20 Months: Start of Inflation Run? Will February Repeat?

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The presumably "vital" BLS is still up and running in the shutdown. It reports a benign CPI this month.