WASHINGTON (AP) -- The Labor Department reports on changes in the consumer price index in January. The report will be released at 8:30 a.m. Eastern time Thursday.
SMALL GAIN: Economists forecast that consumer prices increased just 0.1 percent last month, according to a survey by FactSet, after rising 0.2 percent in the previous month. December's gain was the largest in five months and occurred mostly because of higher gasoline prices.
Excluding volatile costs for food and energy, core prices are expected to have also increased just 0.1 percent in January.
TAME INFLATION: Energy prices probably fell last month, as cheaper gas was only partly offset by higher costs for heating oil.
Since January, gas prices have increased: they averaged $3.38 a gallon nationwide Wednesday, 10 cents higher than a month ago. That's still below the average of $3.75 at this time last year.
Food prices likely ticked up, economists at JPMorgan Chase forecast. But new and used car prices and air fares probably fell.
In short, there are few signs of rising inflation. It has been held back by sluggish growth and a tough job market, which makes it harder for retailers and other businesses to raise prices.
Consumer prices rose just 1.5 percent in 2013, down from 1.8 percent in 2012. Both figures are below the Federal Reserve's 2 percent target.
While most Americans prefer lower prices, economists warn that super-low inflation may slow economic growth. It encourages consumers to postpone purchases and can also make inflation-adjusted interest rates higher, potentially discouraging borrowing.
Low inflation has enabled the Federal Reserve to pursue extraordinary stimulus programs to try and boost economic growth.
The Fed is now trying to unwind some of that stimulus. It cut its monthly bond purchases to $65 billion this month, from $75 billion in January and $85 billion last year. The bond purchases are aimed at lowering long-term interest rates to encourage more borrowing and spending.
But Fed policymakers have expressed concern about the persistence of low inflation. If it remains below target, the Fed could extend its stimulus efforts.
- Budget, Tax & Economy
- Politics & Government
- gasoline prices