Current U.S. Inflation Rate Statistics and News

Explanation and the Monthly Inflation Rate Statistics Since January 2007

Current Rate - February 2017

Groceries
Inflation affects the price of everything you buy. Photo: Thomas Barwick/Getty Images

Prices rose 0.1 percent. Gas prices fell 3 percent after rising 7.8 percent in January. Competition between U.S. shale oil producers and OPEC drove prices down to a 13-year low in oil prices in January 2016. They rose in January once OPEC constrained supply. Find out how oil prices affect gas prices.

The prices of used cars and trucks fell 0.6 percent. Transportation cost 0.7 percent more than in January. 

The cost of medical care services rose 0.2 percent. Medical care commodities fell 0.2 percent. Health care costs rose more slowly once Obamacare took effect. Before that, they increased 3 percent or more a month.

The core inflation rate was 2.2 percent year over year, slightly above the Fed's 2.0 percent target. That gave the Federal Open Market Committee enough reason to raise the fed funds rate another quarter point at its March FOMC meeting. But the Fed prefers the Personal Consumption Expenditures Price Index. Its core inflation rate was 1.7 percent YOY as of January 2017, the most recent release. (Source: "Consumer Price Index Summary," Bureau of Labor Statistics. ​"Personal Income and Outlays," Bureau of Economic Analysis.)

How It Affects You

Gas prices are mostly affected by oil prices
Gas prices are mostly affected by oil prices. Photo: Andresr/Getty Images

The inflation rate is an important economic indicator. It tells you how fast prices are changing in the economy, and where we are in the business cycle

It's measured by the Consumer Price Index which is reported by the Bureau of Labor Statistics each month.

Moderate inflation is actually good for economic growth. When consumers expect prices to rise, they are more likely to buy now, rather than wait. This increases ​demand.  That's because inflation is usually driven by expectations of inflation, as pointed out by Past Fed Chair Ben Bernanke. This means that, if people and investors think prices will go up, they will buy things now, increasing demand and actually driving the prices further up. In other words, inflation is a self-fulfilling prophecy. 

The Federal Open Market Committee reviews the core inflation rate when it decides at its eight FOMC meetings whether to raise the Fed funds rate. The core rate removes the volatile effects of gas, food and oil prices. The Federal Reserve sets a target rate of 2 percent  for the core rate. When the rate is lower than the target, the Fed may use expansionary monetary policy, and lower interest rates to increase it, and ward off deflation and possible recession.  When the rate is higher than the 2 percent target, it may use contractionary monetary policy, and raise rates to keep prices from rising faster than your paycheck.

2017

groceries-dad.jpg
You can't escape inflation. Photo: Katrina Wittkamp/Getty Images

January: Prices rose 0.6 percent due to a 7.8 percent increase in gas prices. That offset a 0.4 percent drop in used vehicles. The YOY core rate was 2.3 percent. 

2016 Annualized Inflation Rate: 1.0 Percent (Core 2.2 Percent)

Gas prices are mostly affected by oil prices.

January: Prices remained flat for the month, due to a 4.8 percent drop in gasoline prices and a 6.5 percent decline in home heating oil costs. Grocery prices were 0.2 percent lower and electricity fell 0.7 percent. 

February: Prices fell 0.2 percent thanks to a stunning 13 percent fall in gas prices. The core rate was 2.3 percent.

March: Prices rose just 0.1 percent due to a 2.2 percent increase in gas prices. Apparel fell 1.1 percent as the dollar weakened.

April: Prices rose 0.4 percent due to an 8.1 percent increase in gas prices. New and used vehicles fell 0.3 percent. 

May: Inflation was a mild 0.2 percent thanks to a 1.3 percent drop in used car and truck prices. Gas prices rose 2.3 percent.

June: There was 0.2 percent inflation thanks to a 3.3 percent rise in gas prices.

July: Prices remained flat for the month. Declines in gas prices were offset by mild increases in the cost of health care.

August: Inflation was 0.2 percent.  Falling auto and gas prices were more than offset by rising health care costs.The core inflation rate was 2.3 percent YOY.

September: Prices rose 0.3 percent thanks to a 5.8 percent rise in gas prices. It offset price drops in restaurants, new and used vehicles, and apparel. The cost of medical care services was flat. The core inflation rate was 2.2 percent YOY. 

October:  Inflation was 0.4 percent for the month. Gas prices skyrocketed 7.0  percent. Slightly lower prices in restaurants, used vehicles, and transportation services offset the spike. 

November:  Prices rose 0.2 percent during the month. Gasoline prices rose 2.7 percent while medical care commodities fell 0.5 percent. 

December:  Inflation was 0.3 percent. Gas prices increased 2.4 percent, while transportation services rose 0.5 percent. The core inflation rate was 2.2 percent year over year.

2015: 0.7 Percent (Core 2.1 Percent)

saudi-oil.jpg
OPEC saw no reason to cut supply. Photo by Liaison / Getty Images

January: Prices fell 0.7 percent, with deflation in nearly all categories. Gas prices plummeted 18.7 percent, thanks to last month's lower oil prices. OPEC and U.S. shale oil producers continued to flood the market with supply. The YOY core inflation rate was 1.6 percent, below the Fed's 2.0 percent target.

February: Month-over-month inflation rose 0.2 percent, thanks to a 2.1 percent rise in gas and oil prices. Medical care services actually dropped 0.2 percent. After months of falling prices, used cars and trucks rose 1.0 percent, a hefty increase. However, these prices are still 2.9 percent lower than last year. The core rate was 1.6 percent YOY. 

March: Inflation rose 0.1 percent for the month, thanks to a 3.8 percent rise in gas and oil prices. Medical care services rose just 0.4 percent. Used cars and trucks rose a whopping 1.2 percent. The YOY core rate was 1.8 percent.

April: Prices rose 0.1 percent, thanks to a 1.7 percent drop in gas prices, and an 8.4 percent decline in home heating prices. Medical care services rose just 0.9 percent. Used cars and trucks rose 0.6 percent. The core rate was 1.8 percent YOY.

May: Month-over-month inflation rose 0.4 percent, prodded by a 10.4 percent rise in average gas prices. Once volatile food and gas prices were stripped out, the core rate was just 0.1 percent.  

June: Prices rose 0.3 percent for the month, thanks to a 3.4 percent increase in gas prices. 

July: Low gas prices continued to keep inflation at bay. Prices for the month only rose 0.1 percent.

August: Energy prices fell 2 percent, forcing overall CPI to drop 0.1 percent.

September: Prices fell 0.2 percent for the month, thanks to a 9.0 percent decline in gas prices and a 2.4 percent drop in fuel oil prices.

October: Prices rose 0.2 percent for the month. Gas rose just 0.4 percent. Apparel fell 0.8 percent, and used vehicles fell 0.3 percent, Health services and commodities rose 0.8 percent and 0.2 percent, respectively. The YOY core inflation rate was 1.9 percent.

November: Plummeting gas prices (down 2.4 percent) sent inflation to 0 percent for the month. That offset small increases in health care (0.4 percent) and transportation (0.6 percent).

December: Gas prices fell another 3.9 percent, sending the overall price index down 0.1 percent for the month. 

 

2014: 0.8 Percent (Core 1.6 Percent)

Home oil
Heating oil prices soared as energy markets coped with a colder then expected winter. Photo by William Thomas Cain/Getty Images

January: Inflation rose a scant 0.2 percent for the month, and 1.6 percent for the year. The YOY core inflation rate was also 1.6 percent. Brutal winter storms pummeled the nation, driving home heating oil prices up 3.7 percent. Natural gas prices rose nearly as much. Fortunately, these price jumps were offset by price drops in gasoline, new cars and trucks and apparel.

These fuel oil and natural gas prices will drop in the spring, as will any price jumps in gasoline. That happens every year, as refineries finish their maintenance and reopen for the summer driving season. Therefore, expect inflation to remain even less of a threat.

February: Monthly inflation was just 0.1 percent, and 1.1 percent for the year. The YOY core rate was just 1.6 percent, well below the Fed's target. A 4.7 percent increase in home heating oil prices was offset by declines elsewhere.

March: Prices rose 0.2 percent during the month, and 1.5 percent for the year. The YOY core rate was 1.7 percent.Falling fuel oil prices were offset by moderate price increases across the board. Despite this strength, it didn't exactly show the strong demand needed to boost hiring.

April: Inflation was 0.2 percent during the month, driven mainly by a 2.3 percent spike in gasoline prices. Year-over-year, prices rose a solid 2.0 percent. Every category, except apparel and automobiles, saw at least a 1 percent increase. However, the core inflation index was only up 1.8 percent, still below the Fed's target.

May: Prices rose 0.3 percent during the month, driven by a whopping 2.3 percent increase in electricity. However, that was due to California's semi-annual climate change credits. Inflation rose 2.1 percent during the year. The YOY core rate rose 2.0 percent. It was driven by a 2.9 percent increase in housing costs, the biggest jump since March 2008.

June: Prices rose 0.2 percent during the month, thanks to a 3.3 percent spike in gas price. New car prices fell .3 percent and used vehicles were down .4 percent. Medical care service costs rose exactly zero percent, a sign that the ACA may be pushing costs down. YOY inflation was 2.1 percent, while the core rate was 1.9 percent, barely missing the Fed’s 2 percent target.

July: Prices barely rose 0.1 percent during the month, as gas and used car prices fell. The YOY inflation rate was 2.0 percent, while the core inflation rate was 1.9 percent. 

August: Deflation raised its ugly head, as prices dropped 0.1 percent in August. Lower energy prices were to blame, including a 2.7 percent drop in gas prices. YOY prices rose 1.7 percent, as did the core rate.

September: Prices fell 0.1 percent during the month. Energy prices continued to fall, counterbalancing small increases in health care, housing, and food. Year over year, both the headline and core inflation rate remained at just 1.7 percent. 

October: There was 0.1 percent inflation since a 2.0 percent drop in gas prices offset a small, 0.1 percent rise in food prices during the month. YOY prices rose 1.7 percent, while the core inflation rate was 1.8 percent.

November: Gas prices fell 6.6 percent, driving the CPI down 0.3 percent. However, keep in mind that gas prices are very volatile since they're based upon commodities trading. They generally rise in the spring in anticipation of higher demand from summer vacationers. The YOY rate was 1.3 percent, while the core inflation rate was 1.7 percent.

December: Prices fell 0.3 percent, thanks to a 9.2 percent drop in gas prices. Used cars and apparel were each down 0.8 percent, while medical commodities only rose 0.9 percent. YOY inflation was 0.8 percent, while the core inflation rate was 1.6 percent.

2013: 1.5 Percent (Core 1.7 Percent)

Stock Market
Beware a stock market bubble. Credit: Getty Images

January: Prices were basically flat, rising just 0.1 percent during the month. How could this be, when everyone knows that gas prices started rising earlier than last year? That's because the BLS survey went out before mid-January when prices started to take off. Similarly, food prices rose exactly zero percent, while used cars and trucks rose just 0.2 percent, as did the cost of shelter and health care. The biggest cost increases were in clothing, up 0.8 percent, and transportation, up 0.5 percent. YOY inflation was 1.6 percent, and the core rate was 1.9 percent. This allowed the Fed to continue Quantitative Easing, keeping interest rates low and boosting economic growth. That’s because core inflation is below its target rate of 2.0 percent.

February: Monthly inflation was 0.6 percent, driven mainly by a whopping 9 percent rise in gas prices. Prices rose 2.0 percent year-over-year. Most important, core inflation was also 2.0 percent, which means the Federal Reserve will not change its expansive monetary policy in the near future. That's good for both the stock market and continued economic growth.

March: Seasonal drops in the price of gasoline and oil forced down the overall inflation rate 0.2 percent, creating deflation. The YOY rate was up just a moderate 1.5 percent overall, and 1.9 percent for the core rate. This means the Fed will continue Quantitative Easing.

April: Prices fell 0.2 percent in April thanks to an 8.1 percent drop in gas prices, which offset mild price increases in most other goods and services, such as used cars and trucks (up .6 percent), new vehicles (up .3 percent) and grocery prices (.1 percent). Health care services actually dropped .1 percent last month. Year over year, prices rose 1.1 percent, while the core inflation rate was 1.7 percent.

May: Prices rose just .1 percent in May pushed down by an overall decline in commodities prices. When compared to last year, prices rose just 1.4 percent. The core inflation rate was 1.7 percent.

June: Gas prices spiked up 6.3 percent, after falling since February. Overall inflation was 0.3 percent during the month. When compared to last year, inflation was 1.8 percent, again because of gas prices. The core inflation rate, which leaves out energy and food prices, was 1.6 percent.

July: The costs for medications, medical equipment, and supplies are .1 percent lower than last year. That's better than overall prices, which rose 2.0 percent in the last year, and 0.2 percent in the last month. Gas prices are 5.2 percent higher than last year and rose 1 percent in July. The YOY core inflation rate is 1.7 percent.

August: Many people were worried that higher interest rates since May would suppress the reviving housing market. However, housing prices rose .2 percent in August, and 2.4 percent in the last 12 months. Keep in mind, the BLS reports on rent prices as a proxy for housing prices. This means it can miss some extreme jumps in price if rentals don't keep up with housing prices. This happened in 2005, which is one reason the Fed missed that asset bubble.

Otherwise, inflation remained mild in August, as overall prices rose just 0.2 percent for the month, and 1.5 percent YOY. The core inflation rate was 1.8 percent. Higher oil prices from the Syrian crisis hadn’t yet filtered into inflation. Gas prices in August actually fell .1 percent. This makes sense because the crisis didn't start sending oil prices skyrocketing until the end of the month. Although prices have since dropped (from $109 to $107 a barrel), the effect will still be felt a bit in the September report.  

September: Prices rose 0.2 percent for the month, and 1.2 percent for the year. However, low-interest rates created an asset bubble in stocks and bond prices (which rise when yields drop.) This doesn't show up in the Consumer Price Index report, so the Fed may miss the warning signals. Instead, it pays attention to the YOY core rate, which rose 1.7 percent.

October: Prices rose a modest 0.1 percent during the month, thanks to a 2.9 percent drop in gas prices. Although this may spark deflation, it wouldn’t be permanent. Gas prices normally decline in the fall and rise in the spring. YOY inflation was 10 percent, and the core rate was 1.7 percent.

November: Prices rose 0.1 percent, keeping inflation at just 1.2 percent for the year, thanks to a drop in gas prices.  The core inflation rate was just 1.7 percent. Many analysts believe QE created an asset bubble in both stocks, which have been hitting new highs, and in bonds, driving the yield on the benchmark 10-year Treasury down to 2.5 percent. That's the blind spot in the Consumer Price Index, which only measures the prices of consumer goods and services. As the retail reports have shown, consumers aren't really creating the demand needed to drive up prices. That's because there's hasn't been much of an increase in wages. 

December: Inflation rose 0.3 percent, the most in six months, creating fears of hyperinflation. Goldbugs caused a rally in the precious metal as a hedge. They were concerned that the Fed's QE would spark prices increases like that seen during the Weimar Republic in Germany. However, the core inflation rate was only up 1.7 percent.

2012: 1.7 Percent (Core 1.9 Percent)

buying-house.jpg
The housing market started healing in 2012. Photo: RK Studio/Getty Images

January: Inflation returned, driven by high gas and oil prices. However, inflation only rose 0.3 percent during the month. Year-over-year, prices were up 2.9 percent, again driven by gas prices that were 9.7 percent higher than last year. The YOY core inflation rate was 2.3 percent. This is above the 2 percent target inflation rate set by the country's chief inflation-fighter, the Federal Reserve, and a signal for it to raise interest rates or at least end Quantitative Easing and other expansionary monetary policy measures. However, in January, the Fed switched to the Personal Consumption Expenditures (PCE), which it considers to be more reflective of true underlying inflation trends. The Core PCE was 1.9 percent in March, just below the Fed's target.

FebruaryHigh gas prices accounted for 80 percent of inflation in February. During the month, prices overall rose 0.2 percent, which contributed to a 2.9 percent increase over the year before. Commodities traders drove up oil prices, which comprise the lion's share of the cost for each gallon of gas. This happens each spring, in anticipation of a surge in demand for the summer driving season. However, in 2012 gas price spikes came early, thanks to fears of a war in Iran. The YOY core rate was 2.2 percent.

March: Prices rose 0.3 percent, while YOY inflation was 2.7 percent. The pain of high gas prices continued, driving higher prices throughout the economy. Gas prices rose 1.7 percent, a whopping 9 percent higher than last year. Subsequent increases in trucking costs translated into higher food prices, as the food index rose .2 percent in March. The core inflation rate, which excludes these seasonal energy and food prices rises, was up 2.3 percent year-over-year.

April: A 0.1 percent rise in inflation hit a 1.5 percent price increase in used cars and trucks, and a .2-.4 percent increase in food, healthcare, and clothing prices. They were offset by a 2.6 percent drop in gas prices. Year-over-year, prices were up 2.3 percent, enough to stimulate the demand needed to get the economy growing at a healthy rate. Expectations of inflation can spur shoppers to buy now to avoid future price increases. The YOY core rate was also 2.3 percent.

May: Overall, prices fell 0.2 percent during the month, thanks to a 6.8 percent decline in gas prices, and low or no price increases in all other categories. Year-over-year, prices were up 1.7 percent, while the core inflation rate was 2.3 percent. This is only a bit higher than the Fed's 2 percent target. Since unemployment is so high, the Fed will tolerate a slightly higher rate than its target, hoping consumer demand will stimulate the economy and create jobs.

June: Prices were unchanged, as gas prices fell a further 2.3 percent. Compared to last year, inflation was just 1.4 percent. Lower gas prices were offset by year-over-year increases in health care, clothing, food, used cars and trucks, and (finally!) housing. The YOY core inflation rate was 2.2 percent.

July: Prices were unchanged overall. A 1.3 percent drop in electricity, and a .2 percent drop in natural gas, offset a .3 percent increase in gasoline. Year-over-year prices were up 1.4 percent, while the core rate was 2.1 percent. Food prices rose 2.3 percent compared to last year. However, this is not because of the drought, according to the USDA.  Those price increases won't show up until late summer. In fact, 86 percent of grocery prices are from related costs, such as processing, transportation, and labor.

August: Prices only rose 0.6 percent for the month, but high summer gas prices returned to plague families trying to go on vacation with a 9 percent increase. During the previous twelve months, prices only rose 1.7 percent, driven by a 4.2 percent increase in health care services and a 3.6 percent increase in health care commodities. Shelter rose 2.1 percent, thanks to higher rents. Instead of trying to measure the actual sale price of houses, the CPI captures it through "rental equivalent." The YOY core inflation rate was 1.9 percent.

September: Prices rose just 0.5 percent, offering no real risk of inflation. Why does it feel like inflation to many people? Once again, you having rising gas prices to thank. Unfortunately, prices only fell in the areas that people don't purchase frequently, such as used autos (down 1.4 percent) and health care supplies (down .1 percent). The YOY rate was 2.0 percent for both headline and core inflation.

October: Prices rose 0.3 percent. Small increases in fuel oil, clothing and transportation were offset by a welcome decline in gas prices. Over the past 12 months, prices rose a moderate 2.2 percent, driven by large increases that aren't likely to come down -- a 9.1 percent increase in gas prices, and a 3.9 percent increase in health care costs. YOY core inflation was 2.0 percent.

November: Is deflation raising its ugly head, despite expansionary monetary and fiscal policies? Probably not. November's 0.2 percent price decline was due to a seasonal drop in gas and oil prices. In fact, prices were up 1.8 percent year over year. The cost of nearly everything rose about the same amount, including food, apparel, and new vehicles. The culprit? Higher gas prices, of course. Even though oil and gas prices were lower than last month, they were still higher than last year. It seems commodities, and the traders who profit from them, have more influence over inflation than the Federal Reserve! The YOY core inflation rate was 1.9 percent.

December: Prices overall did not rise a bit, thanks to lower prices for gas, used cars, and trucks, apparel and healthcare equipment. Lower prices in these areas offset slightly higher prices in natural gas, transportation, and health care services. Year-over-year, prices were up 1.7 percent. The culprits were health care services, food, apparel and new vehicles. The good news is that prices were lower in energy services, such as electricity and natural gas, and used vehicles. The YOY core inflation rate was 1.9 percent.

2011: 3.0 Percent (Core 2.2 Percent)

Woman shopping at supermarket
Food prices rose in 2011, driven by higher gas and transportation costs. Laflor/E+/Getty Images

January: Prices were 0.3 percent higher for the month, and 1.6 percent higher than last year, thanks to a 13.4 percent spike in gas and oil prices, which drove transportation costs up 3.4 percent. This, in turn, partially caused a 2.1 percent jump in food prices. The core rate was 1.0 percent.

February: Prices rose 0.3 percent for the month, and 2.1 percent for the year.  Health care costs were up 3 percent from the prior year. Food prices were 2.3 percent higher, thanks to a 20 percent increase in gas and oil prices. People were concerned that the Fed would reverse course and suspend the QE2 program. However, the core inflation rate was just 1.1 percent, well below its target.

March: The nation's CPI was 0.5 percent for the month, and 2.7 percent higher than last year, driven by a 27 percent increase in gas and oil prices. This, in turn, increased fertilizer and transportation costs, which drove food prices 3.6 percent higher year-over-year. For more, see Why Are Food Prices So High? The YOY core rate was 1.2 percent.

April: Prices rose 0.5 percent for the month. However, economy watchers were alarmed by a 3.2 percent YOY increase in the nation's CPI. The cause? A 33 percent increase in gas and oil prices. This, in turn, increased fertilizer and transportation costs, which drove food prices 3.9 percent higher year-over-year. The Fed wasn't concerned by these volatile commodities prices. It watches the core inflation rate, which was only 1.3 percent -- well below the Fed's target of 2 percent.

May: Inflation edged up 0.4 percent in, thanks to plummeting commodities prices that forced oil down below $100 a barrel. Although this slowing of inflation was good news, prices were still 3.6 percent higher than last year. That's because gas and oil prices were still 36 percent higher when compared year-over-year. The core rate was 1.5 percent.

June: Prices rose 0.0 percent for the month, but 3.6 percent for the year. Oil and gas prices were still 36 percent higher than the year before. The core rate was 1.6 percent.

July: Prices rose 0.3 percent during the month, and 3.6 percent for the year. Many were concerned about inflation, but it wasn't really a threat. The core inflation number was a reassuring 1.8 percent.

August: Prices rose 0.3 percent for the month, and 3.8 percent for the year.  Most important, the YOY core inflation rate rose 2.0 percent in the past 12 months. Why is this number so critical? It's watched by the Federal Reserve when setting monetary policy because it strips out the volatile food and gas prices. The Fed targets the core inflation rate to be at 2 percent because that's healthy for the economy. When prices rise modestly, shoppers expect higher prices. They are more likely to shop now to avoid higher prices in the future. This increases demand, which spurs economic growth. The housing market is a good example of where we could use a little inflation to stimulate demand.

September: Inflation slowed, as the Consumer Price Index rose 0.3 percent during the month. Increases in gas and oil prices were offset by a 1.1 percent decline in the cost of clothing. However, Halloween candy and your holiday meals may cost more than last year. Food is 4.7 percent higher than last year, thanks to a 33 percent increase in gas prices. The YOY inflation rate was 3.9 percent, and the core rate was 2.0 percent.

October: Prices rose 0.1 percent during the month, thanks to a 3.1 percent monthly decline in gas prices. The YOY inflation rate was 3.5 percent. The core inflation rate, when compared to the prior year, was 2.1 percent -- higher than the Fed's target. That's because gas prices were 23 percent  higher than the year before.

November: There was 0.2 percent inflation during the month, as falling gas prices (a 2.4 percent decline) offset a slight increase in heating oil prices. However, YOY prices were 3.4 percent higher, and the core inflation rate was up 2.2 percent, a little higher than the Federal Reserve's 2 percent inflation rate target.

December: Amazingly, there was exactly zero inflation. Falling gas prices (as well as lower automobile and oil prices) offset slight increases in all other categories. YOY prices were 3.0 percent higher, and the core inflation rate was again 2.2 percent.

2010: 1.5 Percent (Core 0.8 Percent)

teenage-patient-with-doctor.jpg
Health care costs rose despite the recession.

January: The CPI only went up 0.1 percent since last month. Prices at the pump rose 4.4 percent percent, while the winter heating season drove oil prices up 6.1 percent. Year-over-year, prices rose 2.6 percent. This was caused by increased costs in health care, which was 3.5 percent higher, and in used cars, up 11.5 percent. However, grocery bills were down 2 percent, while restaurant prices went up 1.6 percent. The YOY core inflation rate was 1.6 percent.

February: Prices fell 0.1 percent during the month. Gas prices fell 1.4 percent, while oil prices dropped 2.4 percent. Compared to last year, inflation stayed at a comfortable 2.1 percent. Higher prices drove health care costs up 3.5 percent and the price of used cars went up 14 percent. However, grocery bills were down 1.5 percent from last year. The YOY core rate was 1.3 percent.

March: Prices rose 0.0 percent for the month. However, a 40 percent increase in gas prices during the year drove the CPI up 2.3 percent in 12 months. Gas prices are based on oil prices, which were only $40 a barrel a year ago. The YOY core inflation rate was just 1.1 percent.

April: Overall, prices were only up 2.2 percent from April 2009, and were flat since March. Only prices for gas and used cars and trucks rose. YOY core inflation was .09 percent.

May: Prices fell 0.1 percent, and year-over-year inflation was 2.0 percent, driven by a 27 percent increase in gas and oil prices. Oil prices were returning to more normal levels, after plummeting to $55 a barrel in May 2009. Health care costs rose 3.6 percent, but the prices for everything else were flat or dropping. Grocery bills were flat, apparel was down .9 percent, and shelter was down .7 percent. The YOY core inflation rate was .09 percent.

June: Prices were flat overall during the month. They rose 1.1 percent in the past 12 months, driven by a 3.5 percent increase in health care costs and a 3.9 percent increase in gas and oil prices. The YOY core inflation rate was .09 percent.

July: Prices edged up 0.2 percent during the month, and 1.2 percent during the year, driven by an 8 percent increase in gas and oil prices and a 3.2 percent increase in health care costs.   The EIA forecast oil prices to edge up slightly, from an average of $77 a barrel to $84 a barrel in 2011. Inflation in oil prices was driven by economic growth in China, Saudi Arabia, and Brazil. The OECD projected oil consumption to increase by 1.5 million barrels per day (BPD) in 2010, and 1.4 million BPD in 2011. Supply was increasing to match demand, but prices rose anyway due to investor confidence in commodities markets. The YOY core inflation rate was .09 percent.

August: During the month, prices rose 0.1 percent, mostly due to a 3.8 percent increase in gas and oil prices. Over the last year, prices had only gone up 1.1 percent. The YOY core inflation rate was .09 percent.

September: Prices rose 0.2 percent for the month. Overall, prices rose 1.1 percent in a year, while the YOY core inflation rate was just 0.8 percent. Gas and oil prices rose 5 percent, driving food prices up 1.4 percent, after declining for about a year.

October: Prices rose 0.3 percent. YOY prices were up 1.2 percent, while core inflation was only 0.6 percent. Prices for food, in general, were 1.4 percent higher in October than last year, after declining for about a year. That's because gas and oil prices went up 9.5 percent.

November: Prices rose 0.3 percent during the month. Overall, prices were only 1.1 percent higher than last year, although the food at home was 1.7 percent higher than a year ago. Higher food prices were due to a 7.7 percent increase in gas and oil prices, which drove transportation costs up 2.9 percent. Furthermore, bad weather in August reduced crop sizes. The YOY core inflation rate was 0.8 percent.

December: Prices rose 0.4 percent during the month, and 1.5 percent during the year. Food at home was 1.7 percent higher than a year ago. Higher food prices were due to a 13.8 percent spike in gas and oil prices, which drove transportation costs up 2.8 percent. The YOY core inflation rate was only 0.8 percent

2009: 2.7 Percent (Core 1.8 Percent)

Unemployed line
Unemployment peaked in 2009, rising above 10%.

January: Prices rose 0.3 percent during the month, and 0.0 percent for the year. YOY core inflation was 1.7 percent.

February: Prices rose 0.4 percent during the month, and 0.2 percent for the year. YOY core inflation was 1.8 percent.

March: Prices fell 0.1 percent during the month, and fell 0.4 percent for the year. This was the first year-over-year decline since 1955. The drop was largely due to energy prices, which fell 18 percent in the last year. This deflation in consumer prices is in addition to stock market and housing price declines. The YOY core inflation rate was 1.8 percent.

April: Prices rose 0.1 percent during the month, but fell 0.7 percent for the year, the largest annual decline since 1955. However, the drop was largely due to a 25 percent drop in energy prices. Food and medical prices rose 3 percent from a year ago. Rentals, clothing, and recreation were up around 1 percent. The "All Other" category was up 7 percent. Lower oil and transportation costs weren't being translated into lower prices across the economy. The YOY core inflation rate was 1.8 percent.

May: Prices rose 0.1 percent during the month, but were down 1.3 percent for the year thanks to a 27.3 percent drop in energy prices. However, food (up 2.7 percent) and medical costs (up 3.2 percent) were rising at a time when consumers could least afford it. The YOY core inflation rate was 1.8 percent.

June: Prices rose 0.8 percent during the month, but were down 1.4 percent for the year. The drop was largely due to a 25.5 percent drop in energy prices. The YOY core inflation rate was 1.7 percent.

July: Prices were flat for the month. Can you hear the giant hissing sound? Prices dropped 2.1 percent for the year, slowly letting value out of the economy like air out of a giant balloon. This was the largest decline since 1950, according to the Bureau of Labor Statistics (BLS). Most worrying is a .7 percent decreasing in rental prices, revealing continued deflation in housing. This indicated continued high foreclosures in the months to come. The drop was largely due to a 28 percent drop in energy prices. The YOY core inflation rate was 1.5 percent.

August: Prices rose 0.3 percent during the month. Overall, deflation continued as prices dropped 1.5 percent from the prior year, largely due to a 30 percent drop in gas prices, and a 5.4 percent drop for used cars and trucks. Unfortunately, food (up .5 percent) and health care (up 3.7 percent) costs continue to rise. The YOY core inflation rate was 1.4 percent.

September: Prices rose 0.2 percent for the month, but were down 1.3 percent for the year. Food prices dropped for the first time in 40 years, as YOY prices fell 2.7 percent.  YOY gas prices fell 36 percent. The only inflation was in health care, where YOY prices rose 3.3 percent. The YOY core rate was 1.5 percent.

October: Prices rose 0.3 percent for the month, and fell 0.2 percent for the year, largely due to a 14 percent drop in energy prices. Grocery bills were down 2.8 percent from last year. Restaurant prices went up 2.2 percent and health care costs rose 3.2 percent. The YOY core rate was 1.7 percent.

November: Prices rose 0.3 percent during the month, thanks to due to a 6.5 percent increase in gas prices. Investors expected a global economic recovery, driving up oil prices as a result. Year-over-year, prices rose 1.8 percent, thanks to a 3.5 percent increase in health care, and a 5.8 percent rise in used car prices. At the same time, grocery bills fell 2.9 percent, while restaurant prices rose 2.1 percent. The YOY core rate was 1.7 percent.

December:  Prices rose 0.1 percent during the month, driven by a .2 percent increase in gas prices, and a 1.1 percent rise in home heating oil. Average prices rose 2.7 percent during the year, thanks to a 3.4 percent rise in health care, and 9.2 percent increase in used cars. Grocery prices fell 2.4 percent, while restaurants cost 1.9 percent more. The YOY core rate was 1.8 percent.

2008: 0.1 Percent (Core 1.8 Percent)

high gas prices
Gas prices rose then plummeted in 2008. Photo by Justin Sullivan/Getty Images

January: Prices rose 0.3 percent for the month, and 4.3 percent for the year. YOY core CPI was 2.5 percent, above the Fed’s 2.0 percent target.

February: Prices rose 0.2 percent for the month, and 4.0 percent for the year. YOY core CPI was 2.3 percent.

March: Prices rose 0.4 percent for the month, and 4.0 percent for the year. YOY core CPI was 2.4 percent. Inflation was 4 percent due to a 17 percent increase in energy costs and a 4.4 percent increase in food prices. The core CPI was 2.4 percent. The Fed stated it may stop lowering interest rates since it is becoming less concerned about a recession caused by the Banking Liquidity Crisis.

April: Prices rose 0.2 percent for the month, and 3.9 percent for the year, thanks to a huge increase in energy and food prices. The core CPI was 2.3 percent, which indicates there isn't much of a threat from inflation. However, high food and gas prices make it feel like inflation.

May: Prices rose 0.6 percent for the month, and 4.2 percent for the year, thanks to an increase in energy costs and a rise in food costs. However, the YOY core CPI was only 2.3 percent.

June: Prices rose 1.0 percent for the month, and 5.0 percent for the year. There was a 25 percent increase in energy prices, which drove a 12 percent increase in transportation costs. The YOY core CPI core was 2.5 percent. 

July: Prices rose 0.7 percent for the month, and 5.6 percent for the year. Inflation was driven by a whopping 30 percent increase in energy prices, and a 13 percent increase in transportation costs. YOY core CPI was 2.5 percent. 

August: Prices fell 0.1 percent for the month, and 5.4 percent for the year. YOY core CPI was 2.5 percent. Headline inflation was driven by a whopping 27 percent increase in energy prices and a 12 percent increase in transportation costs. 

September: Prices rose 0.1 percent for the month, and 4.9 percent for the year. YOY core CPI was 2.5 percent. 

October: Deflation became the greatest threat to the economy, as prices dropped 0.9 percent during the month, the largest monthly decline since the Index was created in 1947. The decline was caused by an 8.6 percent decrease in energy prices. This really just confirmed the deflation the economy had already experienced: a 46 percent (and falling) drop in the Dow, and a 27 percent deflation in housing prices, neither of which were measured by the CPI. Things were even more confusing, because prices had edged up 3.7 percent higher in the last 12 months, and the YOY core CPI was 2.2 percent.

November: Prices fell 1.8 percent for the month, and 1.1 percent for the year. YOY core CPI was 2.0 percent. 

December: Prices fell 0.8 percent for the month, and 0.1 percent for the year. YOY core CPI was 1.8 percent. 

2007: 4.1 Percent (Core 2.4 Percent)

happy-trader.jpg
The economy was still in expansion in 2007, boosting prices. Photo: Photo by Spencer Platt/Getty Images

January: Prices rose 0.2 percent for the month, and 2.1 percent for the year. YOY core inflation was 2.7 percent.

February: Prices rose 0.4 percent for the month, and 2.4 percent for the year. YOY core inflation was 2.7 percent.

March: Prices rose 0.5 percent for the month, and 2.8 percent for the year. YOY core inflation was 2.5 percent.

April: Prices rose 0.3 percent for the month, and 2.6 percent for the year. YOY core inflation was 2.3 percent.

May: Prices rose 0.4 percent for the month, and 2.7 percent for the year. YOY core inflation was 2.2 percent.

June: Prices rose 0.2 percent for the month, and 2.7 percent for the year. YOY core inflation was 2.2 percent.

July: Prices rose 0.2 percent for the month, and 2.4 percent for the year. YOY core inflation was 2.2 percent.

August: Prices rose 0.0 percent for the month, and 2.0 percent for the year. YOY core inflation was 2.1 percent.

September: Prices rose 0.4 percent for the month, and 2.8 percent for the year. YOY core inflation was 2.1 percent.

October: Prices rose 0.3 percent for the month, and 3.5 percent for the year. YOY core inflation was 2.2 percent.

November: Prices rose 0.8 percent for the month, and 4.3 percent for the year. YOY core inflation was 2.3 percent. Since April 2006, core inflation has remained within the 2.2 - 2.3 percent range, higher than the unofficial targeted inflation rate of 2 percent. This is why the Fed was reluctant to lower interest rates, despite many warnings of recession.

December: Prices rose 0.3 percent for the month, and 4.1 percent for the year. YOY core inflation was 2.4 percent.This worried the Fed, although it still planned to lower interest rates .5 points at its next meeting to head off a potential recession.