Research Team at Societe Generale, suggests that in the US accelerated declines in retail energy costs probably left the CPI 0.1% lower in January, echoing a similar-sized downtick in the previous month. Key Quotes “In stark contrast to government statisticians’ expectations for a 1.9% seasonal rise, gasoline pump prices for all grades and formulations nationwide actually tumbled by 4.1% to a seven-year low of $2.06 per gallon during the reference period. Combined with projected reductions in electricity (- 1.5%), home heating oil (-1.3%) and residential natural gas (-0.8%) costs, the resultant 6.1% drop in motor fuel prices likely pared the CPI energy gauge by 3.6%, knocking almost 0.3 percentage point off the headline measure last month. Reflecting developments at the wholesale level, consumer food prices probably edged just 0.1% higher in January, following a 0.4% decline over the November-December span. Excluding forecasted movements in food and energy components, the core CPI likely reaccelerated, rising by 0.2% (0.227% unrounded) following a 0.1% increase in the final month of 2015. A quickening of shelter and medical care services costs, together with rebounds in apparel and new vehicle prices, are expected to contribute to the rise in the core CPI in January. Reflecting a significant lift from base effects discussed in last month’s edition, the year-to-year growth rate of the overall CPI nearly doubled to a 14-month high of 1.3%. The 12-month rise of the core subindex, meanwhile, is expected to edge one tick higher for a third consecutive month to 2.2% – a level last witnessed in mid-2012.” For more information, read our latest forex news.