Energy Prices Continue to Move Up

 

Courtesy of NAHB

According to the Bureau of Labor Statistics, on a seasonally adjusted basis, Consumer Price Index for All Urban Consumers rose 0.4 percent in January, the same as in December. January and December are the largest monthly increases since the 0.7 percent rise in June 2009. On a year-over-year basis the index was up a moderate 1.6 percent.

Food and energy prices, which have been driving the CPI higher in recent months, accounted for two-thirds of the increase. Food prices rose 0.5 percent for the month and were up 1.8 percent from a year earlier. Energy prices rose a strong 2.1 percent in January after jumping 4 percent in December, and were up 7.3 percent from January 2010.

Core CPI, which excludes food and energy prices, rose a modest 0.2 percent for the month and was up a moderate 1 percent from a year earlier. Pay close attention to energy prices which affects the bottom line in how you operate your landscape business.

NAHB forecasts that inflation as measured by the overall CPI will remain moderate throughout 2011, advancing 1.4 percent for the year. There will be some upward pressure on prices in 2012 with the CPI rising at a 1.7 percent annual rate in the fourth quarter.

The rental component of the CPI rose 0.2 percent for the third consecutive month and was up 1 percent from a year earlier. Owner’s equivalent rent, which is largely driven by the rent index without utilities and can be used as a measure of homeownership prices, rose 0.1 percent for the fourth consecutive month and increased 0.5 percent from a year earlier.

– Courtesy of NAHB