Consumer Prices Unchanged Over Last 12 Months

Washington, DC, Feb. 20, 2009--U.S. consumer prices were unchanged over the past 12 months, the lowest inflation rate since 1955, the Labor Department reported Friday.

In January, the consumer price index did as economists had expected, rising a seasonally adjusted 0.3%. It was, the government said, the first increase since July.

Energy prices rose 1.7% last month, also the first increase since July.

The core CPI, which strips out food and energy prices to get a better handle on underlying inflationary trends -- increased 0.2% on a seasonally adjusted basis, higher than the 0.1% gain expected by economists for January. It's the largest gain in the CPI since August.

Over the past 12 months, the core CPI is up 1.7%, the lowest rate seen for core inflation since mid-2004.

Most economists believe the annual CPI rate will go negative in February even if energy prices continue to inch higher. The global recession is forcing producers to slash prices in the face of falling demand for many commodities.

In January, housing prices were unchanged, with large declines in hotel rates and household fuel bills offsetting modest increases in rent and homeownership costs. Housing costs, which represent 43% of the CPI, have fallen over the past six months but were up 2.2% in the past year.