WASHINGTON — Despite worry in some corners about the Federal Reserve’s stimulus efforts stoking inflation, there continues to be little indication that consumer prices are heading higher.
The consumer price index was flat in January for the second month in a row, the Bureau of Labor Statistics reported last week. A drop in gas prices and a halt to recent gains in food prices held down the overall index. Compared with a year ago, the consumer price measure for January was up a mild 1.6 percent.
But that moderate inflation rate will provide little comfort to most consumers. Gas prices have jumped in recent weeks, and the end of the payroll tax holiday at the start of this year has clipped about $40 from the biweekly paycheck for the average worker.
With that, inflation-adjusted average hourly earnings in January were up just 0.6 percent from a year ago, the Bureau of Labor Statistics said.
The core measure of consumer prices, which excludes energy and food and is more closely tracked by the Fed, rose 0.3 percent in January from December, the highest in 20 months. Higher prices for clothes and shelter accounted for much of that increase, although consumers also paid more for airline fares, medical services and school tuitions in January.
Still, the annual core inflation rate in January held at 1.9 percent for the third straight month. That is just a notch below the 2 percent inflation target set by the Fed, which has been pumping money into the financial system to stimulate economic growth and help bring down the high jobless rate.