WASHINGTON — The cost of living was little changed in January for a second month as a drop in energy costs made up for gains in other goods and services.
The unchanged reading in the consumer-price index compared with a 0.1 percent gain projected by the median estimate of economists surveyed by Bloomberg, figures from the Labor Department showed Thursday in Washington. The so-called core measure, which excludes more volatile food and energy costs, increased by the most in more than a year, pushed up by gains in clothing, hotel rates and airline fares.
Fuel costs have climbed this month after an increase in the payroll tax also took a bite out of take-home pay, which may prompt households to rein in purchases and cause companies to hold the line on prices. Joblessness at 7.9 percent may also restrain wage gains, providing a further check on inflation that will give the Federal Reserve room to maintain monetary stimulus.
"The big story from the consumer standpoint is the rise in gasoline prices in the last four weeks, which will start to strain wallets at a time when there's also a problem with tax refunds going out more slowly and the payroll tax hitting them," said Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Conn., who correctly projected prices would be unchanged.
Consumer-price index estimates in the Bloomberg survey of the 84 economists ranged from a drop of 0.1 percent to a gain of 0.4 percent.
Compared with a year earlier, consumer prices rose 1.6 percent in January, the smallest 12-month gain since July, Thursday's report showed. They climbed 1.7 percent in the 12 months ended December.
The 0.3 percent increase in the core reading was the biggest since May 2011 and followed a 0.1 percent gain in December. Economists projected a 0.2 percent pick-up. Core prices rose 1.9 percent for the year through January, the same as in December.