This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Consumer prices nationally and in Utah rose modestly in January, but there are few signs that inflation will a threat anytime soon.
Economists downplayed the increase on the national level, saying inflation probably will ease in the coming months as prices for raw materials level off. This was despite higher costs for food, gas, rent and clothing in the first month of the year.
The consumer price index increased 0.2 percent last month, after a flat reading in December, the Labor Department said Friday.
In Utah, Zions Bank reported that its Wasatch Front Consumer Price Index increased 0.2 percent on a non-seasonally adjusted basis, with consumers seeing higher prices for groceries (up 1.4 percent), housing up (0.7 percent) and utilities (up 0.3 percent). Transportation costs were down 1.3 percent.
"In the coming months, gasoline prices are expected to rise, which will put upward pressure on the Zions CPI," the bank said in releasing the result of its survey. "However, such price pressure is not indicative of general inflation."
Excluding volatile food and energy, so-called core prices nationally ticked up 0.2 percent on a seasonally adjusted basis and 0.4 percent when seasonal fluctuation weren't considered. A big reason for the increase was that clothing prices jumped 0.9 percent. Medical care costs increased, as did rent and tobacco prices.
In Utah last month, though, the cost of medical care declined 0.7 percent.
Car prices nationally were unchanged, and airfares fell, although they are expected to rise by the end of the first quarter.
Still, economists said inflation is likely peaking. For example, clothing prices are higher because of a spike last year in the cost of cotton. When the impact of the cotton hike fades, clothing costs should level off.
The Fed last month said it plans to hold its benchmark interest rate at a record low, near zero, until late 2014. If inflation were to rise rapidly, the Fed would come under pressure to increase rates.
A small amount of inflation can be good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.
And modest inflation, combined with recent increases in income, gives consumers more buying power and should add to economic growth.
Retailers are still reluctant to charge more, even as the economy grows at a moderate pace. Many relied on heavy discounting to boost holiday sales last year.
Oil and gas prices have increased again after dropping late last year, although that has been offset somewhat by falling natural gas costs. The average price for a gallon of gas rose to $3.52 on Thursday, up 14 cents from the previous month.