Consumer Prices Tumble 0.7% In January; Real Wages Surge

Consumer prices fell again in January and inflation turned negative compared to 12 months ago, a reversal fueled by sharply lower oil prices that's offered financial relief to workers and U.S. households. The consumer price index dropped a seasonally adjusted 0.7% last month, marking the third decline in a row, the Labor Department said Thursday. Over the past year prices have actually declined by an unadjusted 0.1%, the first time consumer inflation has been negative since the fall of 2009. Energy prices slumped 9.7%, as the cost of most fuels including gas decreased. Food prices were unchanged. Excluding food and energy, so-called core consumer prices rose 0.2% in January. Core prices are also up 1.6% in the past year, mainly reflecting rising prices for housing, the single biggest expense for consumers. Real hourly wages, meanwhile, soared 1.2% in January, a combination of higher pay and lower inflation. Real hourly wages have climbed 2.4% in the past 12 months.