Image courtesy Yahoo FinanceInflation picked up in the first month of the year, defying optimism from investors and officials over a steady move lower seen in recent readings.
The Consumer Price Index (CPI) for January showed a 0.5% increase in prices over the past month, an acceleration from the prior reading, government data showed Tuesday. On an annual basis, CPI rose 6.4%, continuing a steady march down from a 9.1% peak last June.
Economists had expected prices to climb 6.2% over the year and jump 0.5% month-over-month, per consensus estimates from Bloomberg. New seasonal adjustments released by the Bureau of Labor Statistics on Friday also switched December’s initial reading of a 0.1% monthly drop in headline inflation to an increase of 0.1% in the year’s final month.
Core CPI, which strips out the volatile food and energy components of the report, climbed 5.6% year-over-year, more than expected, and 0.4% over the prior month. Forecasts called for a 5.5% annual increase and 0.4% monthly rise in the core CPI reading.
U.S. stocks slid following the release, while Treasury yields declined, as investors assessed the implications of Tuesday’s release on Federal Reserve policy,
The headline figure for January was the smallest 12-month increase since the period ended October 2021, while the core annual reading was the smallest since December 2021. Even as the inflation picture has improved since the peak of the current cycle last year, rising costs for essential items remain a burden for U.S. consumers.
Policymakers monitor “core” inflation more closely due to its nuanced look at key inputs like housing, while the headline CPI figure has moved largely in tandem with volatile energy prices last year.
Click here to read the full report from Alexandra Semenova at Yahoo Finance.
