The panel on The Big Money Show is discussing recent inflation data, which turned out weaker than many anticipated, alongside dropping energy prices. There’s also a growing sentiment that the Federal Reserve might lower interest rates multiple times by 2026.
Americans might be experiencing some relief. Latest inflation reports from the Department of Labor indicate a significant drop in gasoline prices last year.
According to the Bureau of Labor Statistics, the consumer price index (CPI) for January saw a year-on-year increase of 2.4%. Interestingly, the core CPI, which omits the more volatile categories of food and energy, rose 2.5% during the same time.
Energy prices dropped by 1.5% in January and remained almost unchanged for the whole year, with only a slight decline of 0.1%, mainly driven by lower gas prices.
Data from the BLS indicates that gasoline prices decreased by 3.2% in January and 7.5% over the previous year.
Inflation showed a small dip in January, yet it’s still above the Fed’s goals.
As of February 10, the national average for gasoline was $2.90 per gallon, according to data from the U.S. Energy Information Administration and the Federal Reserve Board.
One year ago, that price was $3.13 per gallon, marking a 7.3% drop, aligning pretty closely with the aforementioned January CPI figures.
Moreover, the recent CPI data revealed a decrease in other energy costs as well.
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Costs for propane and kerosene also fell by 1.5% month-over-month and 7.9% year-over-year.
Fuel oil prices witnessed a 5.7% decline in January and a 4.2% drop over the last year.
While these reductions in gas prices and specific energy categories have eased some consumer pressure, rising costs in other energy sectors are gradually diminishing that relief.
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In terms of electricity bills, there was minimal change, with a small drop of 0.1% month-over-month, although there was an annual increase of 6.3% last year.
City gas service rates increased by 1% in January, resulting in an overall rise of 9.8% compared to last year, which can be a hefty burden for those relying on gas heating this winter.
“I think the CPI landscape in February might look quite different than in January, as energy prices could indeed see a positive shift,” remarked Eugenio Aleman, the chief economist at Raymond James, in a recent note.
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“However, it seems unlikely that transport service price hikes will continue at their current pace. The trends in inflation will depend significantly on how February’s energy prices fluctuate and what occurs with shelter costs during the month,” he added.
