Inflation Continues Rapid Rise in January 2022

In January 2022, the Consumer Price Index for all Urban Consumers (CPI-U) was up by 0.6% on a seasonally adjusted basis. This was down from the 0.8% rise recorded in November 2021 but up from the 0.5% figure for December 2021. The 0.6% rise in January is equivalent to a compound annualized rate of 7.4%.

The all items index has risen by 7.5% during the past 12 months, up from the figure of 7.0% recorded in the 12 months through December 2021. This once again represents the biggest 12-month increase in nearly 40 years, this time being the largest year-over-year surge in prices since the period ending in February 1982.

Key Drivers: Food, Electricity, and Shelter

The January 2022 rise in the all items CPI-U was driven mainly by increases in the prices of electricity (up by 4.2% for the month), food (up by 0.9% for the month), and shelter (up by 0.3% for the month).

Categories that recorded price increases of more than 1.0% for the month were fuel oil (up 9.5%), energy services (up 2.9%), used cars and trucks (up 1.5%), and apparel (up 1.1%). The only declines observed in January were for gasoline (down 0.8%), energy commodities (down 0.6%), and utility piped gas service (down 0.5%).

Over the past 12 months, the energy index was up by 27.0%, while the food index increased by 7.0%. The index for all items less food and energy rose 0.6% in January, the same increase as in December. This was the seventh time in the past 10 months it has increased by at least 0.5%. Over the past 12 months, the index for all items less food and energy was up by 6.0%.

Energy

The energy index was up by 0.9% in January, with an increase in the electricity index being partially offset by declines in the gasoline index and the natural gas index, as noted above. Over the past 12 months, while the overall energy index was up by 27.0%, gasoline rose by 40.0%, energy commodities by 39.9%, fuel oil by 46.5%, utility piped gas service by 23.9%, energy services by 13.6%, and electricity by 10.7%.

Food

The food index increased by 0.9% in January, with food at home having risen by 1.0% and food away from home by 0.7%. Over the past 12 months, the overall increase of 7.0% in the price of food includes a 7.4% rise in food at home and 6.4% for food away from home.

Vehicles

The rising prices of vehicles, both new and used, have been major contributors to overall inflation. New vehicle prices were unchanged in January but up by 12.2% over the past 12 months. Used cars and trucks saw increases of 1.5% in January and 40.5% over the past 12 months.