The latest inflation data released by the US Department of Labor shows that over the past year, oil prices have significantly decreased, bringing some relief to the American people.
According to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS) on Friday, January’s overall inflation rate increased by 2.4% year-on-year, while the core CPI, which excludes volatile food and energy prices, rose by 2.5%. Energy prices in January fell by 1.5%, with a marginal 0.1% decrease over the past year, mainly due to the decline in oil prices.
Data indicates that fuel prices of all types in January dropped by 3.2%, accumulating a 7.5% decrease over the past year. According to the Energy Information Administration (EIA) and Federal Reserve data, as of February 10, the average gasoline price in the US was $2.90 per gallon, representing a 7.3% decrease compared to $3.13 per gallon a year ago.
Prices of other energy sources also saw declines. Propane, kerosene, and firewood prices fell by 1.5% month-on-month and 7.9% year-on-year. Heating oil prices dropped by 5.7% in January, accumulating a 4.2% decrease over the past year.
While the decline in natural gas and the aforementioned energy prices alleviated consumer pressure, significant increases in other energy prices offset these gains. Electricity prices remained relatively stable, with a minor 0.1% decrease compared to the previous month, but saw a 6.3% increase over the past year. In January, public utility natural gas service fees rose by 1%, marking a 9.8% increase from the same period last year, posing a considerable expense for households relying on natural gas for heating.
Eugenio Aleman, Chief Economist at Raymond James, pointed out in a report that the CPI data for February may show significant differences compared to January. While energy prices may exhibit an upward trend in February, he estimates that the increase in transportation service prices will be minimal. The inflation trend may depend on the reversal of energy prices and housing price trends in February.