New numbers from the U.S. Bureau of Labor Statistics show some promising news: consumer prices went down for the first time in several months. The Consumer Price Index (CPI) dipped by 0.1 percent in December from the month before. However, that doesn’t tell the whole story.
The gasoline index dropped by a whopping 7.5 percent (seasonally adjusted) while the price index for most other items such as shelter, food, and electricity actually increased. So, while the average price for consumer products stayed mostly the same, some products became cheaper while others increased in price. This data is seasonally adjusted, so it already takes into account the typical price changes going into the cold winter months.
On a year over year basis, the CPI increased by 1.9 percent in 2018. The last time that the CPI increased by less than 2 percent (in year over year gains) was back in August 2017. In other words, consumer prices aren’t increasing as quickly as they used to.
The consumer price index takes into account typical consumer costs such as rent, food, gas, clothes, and medical services.