WASHINGTON Consumer prices were flat for a second straight month in January, providing scope for the Federal Reserve to maintain its very accommodative monetary policy stance to stimulate the sluggish economy.
The Labor Department said on Thursday its Consumer Price Index was held back by weak gasoline prices and food prices, which were unchanged after rising over the past months.
Economists polled by Reuters had expected the CPI to edge up 0.1 percent. In the 12-months through January, consumer prices rose 1.6 percent, the smallest gain since July. They had advanced 1.7 percent in December.
However, consumer prices excluding food and energy rose 0.3 percent - the largest gain since May 2011. The so-called core CPI had increased 0.1 percent in December.
In the 12 months through January, core CPI increased 1.9 percent after rising by the same margin in December. That is just below the Fed's 2 percent goal.
The U.S. central bank last year embarked on an open-ended bond buying program and said it would keep it up until it saw a substantial improvement in the outlook for the labor market. It hopes the purchases will drive down borrowing costs.
The Fed also has committed to hold interest rates near zero until unemployment reaches 6.5 percent, provided inflation does not threaten to push over 2.5 percent.
But minutes of the January 29-30 policy meeting published on Wednesday suggested it might have to slow or stop the asset purchases before it sees an acceleration in job growth because of concerns over the costs of the program.
Gasoline prices fell 3.0 percent after dropping 1.9 percent the prior month. But the decline in gas probably has run its course as prices at the pump have increased 44 cents so far this year.
Elsewhere, apparel prices increased 0.8 percent after gaining 0.1 percent in December. New motor vehicle prices rose 0.1 percent after advancing 0.2 percent the prior month.
Prices for used cars and trucks rose 0.2 percent after six consecutive months of declines. Airline fares rose for a fifth month in a row.
Housing costs edged up, with owners' equivalent rent rising 0.2 percent.