The arrival of the polar vortex last week brought bone-chilling cold to a large swathe of the Midwest and the Northeast. Consumers are going to see higher heating bills for January and early February as a result. However, plentiful supplies of heating oil and propane combined with relatively low prices will mean less of a bite into discretionary incomes than might otherwise be the case.
It also means that energy price inflation will remain low into January’s data. It is not unusual for heating costs to rise in the December-January period. This year, both heating oil and propane actually declined slightly in price per gallon.
The January CPI report at 8:30 ET on Wednesday, February 13 will include updated seasonal adjustment factors and revised data for prior years. A look at the seasonal adjustment for January 2018 suggests it allows for some upward movement in prices for fuel oil (101.076) and propane, kerosene, firewood (103.705).
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