CONSUMER PRICE INDEX: JANUARY 2009

[pinqy]

Source: Bureau of Labor Statistics

On a seasonally adjusted basis, the CPI-U increased 0.3 percent in January after declining in each of the
three previous months. The energy index climbed 1.7 percent in January, its first increase in six months, but it was still 31.4 percent below its July 2008 peak level. Within energy, the gasoline index rose 6.0 percent in January after a 19.3 percent decline in December. However, some energy components continued to decline; the fuel oil index fell 3.7 percent in January and the index for natural gas declined 3.6 percent. The food index, which rose sharply during the summer and moderated through the fall, increased 0.1 percent in January after being virtually unchanged in December. The food index has risen 5.3 percent over the past year.

Read more: http://www.bls.gov/news.release/pdf/cpi.pdf

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It's odd to see an increase in prices as a good sign, but with this small increase, and the larger than expected increase for the January Producer Price Index perhaps deflation is not as much a worry as many have feared. On the other hand, this could all just be a last ditch effort by producers and stores to compensate for slower sales.

[Lucky Luciano]

1. inflation would certainly be a good sign right about now...

Assuming the inflation were not the result of a supply shock of some kind which would be a disaster, then it would be a sign of better employment numbers....What I am really looking for to get a bullish signal is a sustained bounce in commodities like copper, nat gas, iron, aluminum, lumber, etc. Without that I cannot imagine how the economy can be seen as recovering.