WASHINGTON — The January CPI data reflected some of the usual start-of-year price hikes but overall remained modest.

January CPI was unchanged overall, but core advanced 0.3% for a 1.6% increase overall and a 1.9% jump in core rates over the year. Unrounded core was up 0.25138%, barely edging to a 0.3% rise and further proof that prices are on the tame side.

Food prices were unchanged as dairy and fruits and vegetables rose. But meats were unchanged and beverages fell.

Energy prices fell 1.7% in a third monthly drop as only electricity gained at +1.1%. Note that the CPI survey closed at mid-month, and spot prices, especially for gasoline, have since risen, suggesting February could show higher energy costs.

In core apparel was up 0.8% in gains across categories, but unadjusted prices fell, especially for women's' clothing. Recreation was 0.3% higher as cable costs jumped, drugs rose 0.4%, airfares soared 1.1% as demand recovers, and tobacco gained 0.5%. These all contributed to rising core.

Owners' equivalent rent was up 0.2% for a 2.1% rise over the year. Used cars prices rose 0.2%, ending a string of six drops.

We are inclined to discount the slightly outsized January core as start-of-year price gaps. These might retrench ahead, and in any event overall inflation remained modest at the start of 2013.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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