Inflation rate remains low as January prices barely budge

WASHINGTON -- Consumer prices barely budged last month, a slowdown that showed inflation was well in check to start the year -- and maybe running too low.

The consumer price index rose 0.1% in January, down from the 0.2% increase the previous month, the Labor Department said Thursday.

During the 12 months ending in January, prices increased 1.6%. That was the same annual rate as in December and below the Federal Reserve’s target of 2%.

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January’s small price increase was in line with analyst expectations.

Energy prices rose 0.6% last month, but that was down from a 1.6% increase in December -- partly because gas prices dropped 0.1% last month.

Prices for new vehicles fell 0.3% in January. Food prices rose 0.1%.

Stripping out volatile food and energy costs, so-called core prices still rose just 0.1% in January. The annual core rate was 1.6%.

The Fed uses a different government measure to monitor inflation, based on personal consumption expenditures, that showed just a 1.2% annual rate through December.

Some Federal Reserve policymakers are concerned that inflation has been running low, and worry that could pose a risk to economic growth, according to minutes of their January meeting released Wednesday.

Several members of the Federal Open Market Committee argued that the central bank’s forward guidance about interest rates “should give greater emphasis to the committee’s willingness to keep rates low if inflation were to remain persistently below the committee’s 2% longer-run objective,” the minutes said.