US consumers continued to see higher prices for common goods in January. The consumer price index, which indicates inflation, rose 0.4% during January, according to statistics [.pdf] released today from the Labor Department. This marks the seventh consecutive month with an increase in the cost of goods. Since July, inflation totals 1.9%, reflecting the trend for rising costs in the US economy. Price rises in both gasoline and food were responsible for a majority of the monthly increase.
In eleven of the past twelve weeks, the average cost for a gallon of gas has risen. A gallon of gas currently averages $3.19, according to the US energy administration. This is the highest price for a gallon of gas throughout President Obama’s administration. In the past twelve months, the price of gasoline has risen 13.4% – more than the price of any other consumer good.
Overall, the energy index, which includes gasoline and energy utilities, increased 2.1% during January. This is the seventh consecutive month with an increase in the energy index. Energy is not only becoming more expensive for consumers, but also for producers.
The cost to produce energy increased 1.8% in January, according to the producer price index [.pdf]. Energy production costs have gone up four consecutive months. Similar to energy production, the cost to produce food rose 0.3% in January and marks the fifth consecutive month with an increase.
With rising costs to produce food, consumer food prices are also rising. In January alone, food prices rose 0.5%, which is the greatest monthly increase in food prices since September 2008 [.pdf] or 27 months ago. Fruits and vegetables increased 1.3%, baked goods rose 0.8%, and meats & dairies increased 0.9%. Since January 2010, prices for meats & dairies increased 6.2%. In other words, a $3 gallon of milk costs nineteen cents more in January 2011 than January 2010.
In addition to rising prices of food and energy, other goods with noticeable increases during January include: apparel with a 1.0% increase, public transportation with a 1.9% increase, the rent index with a 0.2% increase, and airline fares with a 2.2% increase. Airline fares have increased five consecutive months and have risen 9.8% in the past twelve months. In other words, a $100 airline ticket costs $10 more in January 2011 than January 2010.
As the rising prices of various goods show, US consumers are able to buy less in 2011 than they were in 2010. Particularly with the current peak of gasoline prices, consumers can expect the rising costs of production to continue to raise prices in February.