Previewing Tomorrow's CPI

The Consumer Price Index data for January will be released Friday morning at 8:30 a.m. ET. The statistic is a measure of inflation based on changes in prices of fixed group of goods and services purchased by consumers. The one-month seasonally-adjusted CPI was unchanged in November and December. A consensus of analysts predicts a 0.3 percent increase in the CPI in January, the largest percent increase since September 2011. The CPI has been between 1 percent and 4.5 percent since December 2009 according to a Feb. 16 Bank of America report. The 12-month percent change in CPI has decreased steadily since September 2011. In November, the 12-month percent change in CPI was 3.4 percent and it was 3 percent in December. Inflation drives investors to commodities, with gold at the forefront. Gold has increased in price by nearly $200 an ounce since the start of the year. Gold has been tied to market volatility and uncertainty. The value decreased Feb. 3 with a positive jobs report, and could spike with a report of increased inflation as people hedge the U.S. dollar. Companies which mine for gold may also be a good investment, as the commodity increases in value. Newmont Mining Corporation NEM reports 2011 earnings next week and they are estimated to show a 20 percent year-over-year improvement. Stock in the Greenwood Village, Colorado-based company has declined in value this year, from $62.08 to $59.60 at the end of the trading day Wednesday. There has been concern that inflation will be fueled by low interest rates from the Federal Reserve Bank, which have been hovering near zero for the past three years. Chairman Ben Bernanke reiterated his plans to keep the interest rate low until 2014 to spur higher employment in a Senate Budget Committee hearing on Feb. 7. “We still have a long way to go before the labor market can be said to be operating normally,” Bernanke said. As long as inflation stays below a 2 percent annual target set by the Federal Reserve Bank and Bernanke Jan. 25, the CPI information will likely not be incentive for Bernanke to change tactics. Treasury inflation-protected securities, which are designed to hedge against inflation by being tied to a cost of living index, pay a guaranteed rate of return. The PIMCO 105 year U.S. TIPS Index STPZ has increased from $53.35 at the beginning of the year to $54.03 at the end of the trading day Wednesday. In December indexes for gasoline, household energy and vehicles declined. Indexes for food, shelter, recreation, medical care and tobacco increased, indicating other opportunities for investment. Core CPI, which excludes food and energy, increased 0.1 percent in December and 0.2 percent in November. Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.