US consumer prices revised higher in December, November

US monthly consumer prices rose in December instead of falling as previously estimated and data for the prior two months was also revised up, which some economists said raised the risk of higher inflation readings in the months ahead.

The consumer price index (CPI) edged up 0.1 per cent in December rather than dipping 0.1 per cent as reported last month, the Labor Department’s annual revisions of CPI data showed on Friday (Feb 10). Data for November was also revised higher to show the CPI increasing 0.2 per cent instead of 0.1 per cent as previously estimated. In October, the CPI rose 0.5 per cent, revised up from the previously reported 0.4 per cent increase.

The revisions were the result of recalculated seasonal adjustment factors, the model used by the government to strip out seasonal fluctuations from the data.

This routine procedure, which the Labor of Department’s Bureau of Labor Statistics undertakes every year, covered data from January 2018 through December 2022. The not seasonally adjusted data are not revised.

“On the whole, we don’t see major implications for our inflation outlook coming from the updated seasonal factors,” said Daniel Silver, an economist at JPMorgan in New York. “But the stronger recent trend for the seasonally adjusted data does generate some upside risk looking ahead.”

Excluding the volatile food and energy components, the CPI rose 0.4 per cent in December, instead of 0.3 per cent as previously reported. Data for November was revised up to show the so-called core CPI advancing 0.3 per cent instead of 0.2 per cent as initially estimated. October core CPI data was unrevised.

SEE ALSO

US weekly jobless claims increase, labour market still tight

Data next Tuesday is likely to show the CPI climbing 0.4 per cent month-on-month in January and the core CPI gaining 0.4 per cent as well, according to a Reuters survey of economists.

Higher inflation forced the Federal Reserve to adopt an aggressive monetary policy stance, with the US central bank hiking its policy rate 450 basis points since last March from near zero to a 4.50 per cent-4.75 per cent range. The Fed in recent months has slowed the pace of its interest rate increases. REUTERS