The Bureau of Labor Statistics announced this morning that an important measure of inflation, the Consumer Price Index, rose by 0.2% in January on a seasonally adjusted basis. That matches the rise for the prior four months. It was also lower than the 0.3% rate that economists expected. So-called "core" inflation, which excludes food and energy, actually declined by 0.1%. This data and the numbers behind it show that inflation is still under control.

First, here's monthly change in CPI for the past year provided by BLS:

If you look at the components of inflation, it becomes clear that January's rise is due mostly to food and energy. For the month, food prices rose by 0.2% and energy prices rose by 2.8%. If you take those factors out of the equation, then "core" CPI actually declined by 0.1%. That's very low. In fact, it's the first negative reading for this statistic since the early 1980s. Here's a graph since 2000:

Without food and energy, you actually find a very smooth line for the 12-month percent change in CPI:

As you can see, the red line is virtually flat. Most movement in the price level is being driven by food and energy, but mostly energy. Within energy, gasoline prices rose 4.4% in January -- the biggest increase since August. Gasoline prices have also risen 51% in the past 12 months.

The other than food and energy, the only other item categories with price levels that rose in January were medical-related goods and services and used autos. All others declined.

Today's inflation news should serve as a reminder that inflation isn't what we should be worrying about at this time. Even with the economic improvement we're experiencing, inflation is clearly under control. In fact, the measure without food and energy is deflationary. Monetary supply tightening will have to happen eventually, but this data makes clear that doing so in the near-term would be premature. The risk of a double-dip recession continues to far outweigh that of wild inflation.