Cost of living in the United States rose less than expected for the month of January and the core inflation that excludes the volatile items like - food and fuel, fell for the first time since 1982, approving Ben Bernanke's hypothesis of a 'recovery without inflation'.

According to the data released by Department of Labour, the CPI increased 0.2 per cent for a fifth straight month, excluding energy and food, the index unexpectedly fell 0.1 per cent. Till the time inflation is subdued, Fed will be able to keep the benchmark interest rate close to zero to help invigorate the recovery.

Major retailers have kept prices low keeping in mind the economy is still in a wobbly recovery and the purchasing power is quite low. Since the unemployment is high people don't have much money to spend as they used to, thereby demand for goods, which has kept inflation down.

Food costs, which make up about 15 per cent of the CPI, increased 0.2 per cent and shelter costs fell 0.5 per cent. New-car prices fell 0.5 per cent in January and apparel costs dropped 0.1 per cent.