The Consumer Price Index (CPI) slowed to a +0.1% increase in January after three consecutive months of +0.2% increases, but on a yearly basis prices increased by +0.2% to +2.5%, the highest level since October 2018. Most of the increase was due to a +0.4% increase in the cost of shelter, with rent up +0.4% (+3.8% Y/Y), and owner’s equivalent rent up +0.3% (+3.3% Y/Y), and additional increases for food (+0.2%, +1.8% Y/Y) and medical services (+0.3%, +5.1% Y/Y). Energy costs were down -1.7% for the month, largely due to a ‑1.6% drop in the price of gasoline, although on a yearly basis energy costs were up as a +12.8% increase in gasoline helped push energy up +6.2% overall. The core index, which removes the volatile food and energy components, was up +0.2% for the month and +2.3% for the year.

Retail sales for January were up +0.3% to $529.8 billion, while sales for November and December were revised downward by -0.1% each to +0.2% gains. Sales were up +2.1% (‑1.3% Y/Y) at building supply stores, and up +2.3% (+9.5% Y/Y) at “miscellaneous store” retailers (NAICS code 453), but dropped -3.1% (0.0% Y/Y) at clothing stores and -0.5% (‑3.2% Y/Y) at electronics stores. The retail sale numbers are not adjusted for inflation, and January’s drop in gasoline prices pushed down gas station sales by -0.5%, although yearly sales were up +10.4%. In addition to strong yearly gains at gasoline stations and miscellaneous stores, restaurants were up +7.5% Y/Y, and nonstore (i.e. online) stores were up +8.4% Y/Y. General merchandise stores were up +0.5% (+2.1% Y/Y), with department stores up +0.1% for the month and -5.5% for the year.

Industrial production was down -0.3% (-0.8% Y/Y) as unseasonably warm weather dropped utilities production -4.0% (-6.2% Y/Y) and Boeing’s slowdown in aircraft production pulled the manufacturing production index down to -0.1%. Excluding the drop in civilian aircraft production, manufacturing output was up +0.3% for the month, but December’s previously reported +0.2% manufacturing gain was downwardly revised to +0.1%, and manufacturing was down -0.8% for the year. Automotive products rebounded to a +2.8% gain after falling ‑5.4% in December, and were up +5.3% for the year. Over the previous 12 months, capacity grew +5.1% for mining, +2.5% for utilities, and +1.3% for manufacturing, and while capacity usage grew for mining (+0.8% to 90.7%), it fell for manufacturing (-0.1% to 75.1%) and utilities (-3.2% to 70.6%).