Why did consumer prices rise last month? Gas prices.

Consumer prices rose 0.3 percent in December, largely due to an unexpected jump in gas prices and other energy costs. Gas prices could rise again in late January and put more upward pressure on the consumer price index. 

|
Mario Anzuoni/Reuters/File
Gasoline drips off a nozzle during refueling at a gas station in Altadena, Calif. A slight rise in gas prices put upward pressure on the consumer price index in December.

Consumer prices rose 0.3 percent in December – its highest increase since June – largely on a surprising uptick in gas prices. 

Last month saw an unusually high number of drivers on the road for a time when most people are curled up by the fire. That put upward pressure on gas prices and in turn inflated the consumer price index (CPI).

Gas prices have remained largely flat since then, as the infamous polar vortex kept most of the nation indoors. But drivers could see more pain at the pump come later this month when refiners begin seasonal maintenance.

"Generally, when winter comes around people aren’t driving as much," says Michael Green, a spokesman for AAA, the national motor club based in Heathrow, Fla. "No one wants to drive when its dark and cold and icy outside, so they buy less gasoline." 

That doesn't appear to have been the case this past December. AAA projected 85.5 million would travel by car between Dec. 21 and Jan. 1. That's the highest number the motor club has ever forecast for the winter holidays. 

One possible explanation? Optimism about the nation's finances.   

"People believed the economy was stronger, and whenever that happens you do see more people driving," Mr. Green says.

Gas prices rose 0.7 percent in December, according to the Department of Labor. That may not seem like much, but because December gas prices are typically expected to fall, the change is more significant. The Department of Labor's seasonally-adjusted gas prices index jumped 3.1 percent, after falling 1.6 percent in November. That, combined with rises in fuel oil and electricity prices, made up the bulk of the CPI's 0.3 percent increase. 

So far, January hasn't seen much change in gas prices. The icy polar vortex froze over much of the nation, disrupting production at around a dozen refineries across the country, according to AAA. That threatened to raise gas prices, but it was offset by fewer people venturing outside during the subzero temperatures.

"Supply problems were balanced by decline in demand, given how cold it was," Green says.

National gas prices have been within a cent of $3.31 since Dec. 27, according to AAA, averaging $3.30 Thursday.

The end of January may not be as pleasant at the pump as many refineries go off-line to perform seasonal maintenance work. If the weather is mild, the economy grows, and people get out to drive, it could significantly boost gas prices.  

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Why did consumer prices rise last month? Gas prices.
Read this article in
https://www.csmonitor.com/Environment/Energy-Voices/2014/0116/Why-did-consumer-prices-rise-last-month-Gas-prices
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe