Charts of the Week

Inflation

Chart of the Week for February 15, 2019 - February 21, 2019

The year-over-year change in the Consumer Price Index in January was the lowest since June 2017.

The Consumer Price Index ("CPI") is a closely watched economic indicator published monthly by the Bureau of Labor Statistics. It is a measure of the average change over time in the prices paid by urban consumers for a fixed market basket of consumer goods and services. The chart above shows month-end, year-over-year change in CPI from January 2018 through January 2019.

CPI increased by 1.6% on a year-over-year basis in January 2019, which was the slowest growth since June 2017, and a decrease from the five-year high of 2.7% reported in July 2018. The January 2019 CPI fell for the third straight month, as energy prices have fallen with a -4.9% year-over-year decrease in January. Core CPI is one indicator monitored by the Federal Reserve Board ("Fed") to measure inflation. It excludes the volatile food and energy sectors, and was up 2.1% year-over-year for January 2019, which was about the Fed's target of 2% annual inflation growth. Based on various economic data points including inflation, the Fed announced in January 2019 that it may pause the pace of rate increases that began in December 2015, and included four rate increases in 2018.

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