Consumer Prices Didn't Increase At All in January --- Situation Hasn't Occurred In Over Four Years; Inflation Is Seen Tamed
WASHINGTON -- Overall consumer prices didn't increase at all in January, according to the Labor Department, some thing that hasn't happened in more than four years.</br></br>Analysts said the figures show, yet again, that inflation is well under control despite a noticeably improving economy.</br></br>Last month's steady prices followed a moderate increase in December, when prices were 0.2% above November's. The bitterly cold weather didn't damage crops enough to force up prices, as the cost of food declined last month. Clothing, trans portation and energy prices declined as well, while housing prices moderated. Medical-care and entertainment prices both rose 0.3%, the same as they did in December. The so-called core rate of inflation, which excludes the volatile food and energy sectors, was up only 0.1%, com pared with a 0.2% rise in December.</br></br>January's consumer price report marks the first in which the Labor Department has used new seasonal adjustments to help diminish the report's tendency to show larger price increases at the beginning of the year and smaller ones at the end.</br></br>For that reason, analysts were unsure how much credence to put into the January price figures. "I don't believe the headline should read 'inflation is dead,' but if I saw no change at all in February and March, I would consider it a real trend," said Kathryn Kobe, economist for Joel Popkin & Co. in Washington.