WASHINGTON (MarketWatch) — U.S. prices for consumer goods and services were unchanged in January for the second month in a row, as higher costs for housing, clothes and airline fares were offset by a seasonally adjusted decline in energy expenses.

In January, the consumer price index was flat on a seasonally adjusted basis, the Labor Department said Thursday. Economists surveyed by MarketWatch expected a 0.1% gain.

Consumer prices have risen just 1.6% in the past 12 months, dampening concerns about an outbreak of inflation. Higher inflation is a negative for bonds, which prices rose after the CPI and another report showing a rise in jobless claims. Read: Jobless claims climb 20,000 to 362,000.

“Inflation remains a back-burner problem, trumped by slow growth and the lackluster job market,” said Jim Baird, chief investment strategist at Plante Moran Financial Advisors.

The muted level of consumer prices also gives the Federal Reserve leeway to continue its massive bond-buying stimulus program, though more central bankers are starting to worry that it could lead to speculative bubbles. Read: Uneasy Fed plans bond-buying debate.

The cost of food was flat after three straight 0.2% increases. Dairy and vegetable prices rose slightly, but the cost of beverages fell.

The energy price index fell a seasonally adjusted 1.7% in January because prices did not rise as fast as they normally do in the first month of the year.

Yet energy costs actually rose slightly excluding the adjustments and higher prices at the pump almost certainly will be reflected in February’s CPI report. Gas prices have been surging since early January as refiners switch to new blends and several plants have experienced temporary shutdowns.

The spike in gas prices into February “will sharply boost headline inflation in the next report and weigh heavily on real consumer income,” economists at Morgan Stanley wrote in a note.

Gasoline prices are displayed on a signboard at a 76 gas station in Encinitas, California, February 19, 2013. Reuters

Excluding food and gas, core consumer prices climbed 0.3% in January. The shelter index, which accounts for about four-tenths of the overall CPI, rose 0.2%.

Airline fares jumped 1.1%, meanwhile, and clothing costs advanced 0.8%.

Prices also rose slightly for recreation, medical care and used vehicles. The increase in prices for used cars and trucks was the first in seven months.

The core CPI is viewed by the investors and the Federal Reserve as a good barometer of inflationary trends because food and energy costs can see-saw sharply from month to month.

Still the core rate was unchanged on a year-over-year basis at 1.9% for the third month in a row.

The Labor Department also reported that average hourly earnings of American workers rose an inflation-adjusted 0.2% in January, and they are up 0.6% in the past year.