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Inflation Surges: Consumer Prices Up 3% In January, Crushing Chances of Rate Cuts

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mystery-ak:
John Carney 12 Feb 2025

Inflation in the United States surged higher in January.

The Department of Labor said Wednesday that the consumer price index (CPI) rose 0.5 percent in January from the prior month, much more than expected. Compared with a year ago, consumer prices are up three percent.

Economists had expected the monthly pace of inflation to decline to 0.3 percent after prices rose 0.4 percent in December. The median forecast called for a 2.9 percent gain over the past 12-months, matching the prior month’s year-over-year gain. None of the economists surveyed by Econoday forecast prices rising as fast as 0.5 percent for the month or three percent for the year.

Core inflation, a metric that excludes volatile food and energy prices, rose by 0.4 percent for the month, twice the rate in December. Economists had forecast a smaller increase to 0.3 percent.

Compared with a year ago, core prices are up 3.3 percent, more than the 3.2 percent recorded in December. Economists had forecast a decline in the year-over-year rate to 3.2 percent.

The unexpected strength of inflationary forces calls into question the Fed’s decision to cut rates at each of the final three meetings of the Federal Open Market Committee last year, including the stunning three-quarters of a point cut on the eve of the election in September.

more
https://www.breitbart.com/economy/2025/02/12/inflation-surges-consumer-prices-up-3-in-january/

mystery-ak:
More here

Inflation rises 3% in January, hotter than expected
Labor Department releases closely watched January inflation data

By Eric Revell FOXBusiness

Inflation ticked higher in January as stubbornly high prices continued to strain Americans' household finances as the Federal Reserve weighs a continued pause to its interest rate cut plans.

The Labor Department on Wednesday said that the consumer price index – a broad measure of how much everyday goods like gasoline, groceries and rent cost – increased 0.5% in January while it rose to 3% on an annual basis. The annual figure is the highest since June 2024.

Both the annual and headline CPI figures were hotter than the estimates of economists polled by LSEG, who had predicted inflation rose 0.3% on a monthly basis and 2.9% from a year ago, and came in higher than last month's readings of 0.4% and 2.9%, respectively.

So-called core prices, which exclude more volatile measurements of gasoline and food to better assess price growth trends, were up 0.4% in January and 3.3% on an annual basis and were hotter than expected. LSEG economists had estimated a monthly rise of 0.3% and annual increase of 3.1%. Both figures were 0.1 percentage points higher than last month.

The report showed that inflationary pressures in the U.S. economy remain persistent despite progress in bringing inflation closer to the Federal Reserve's 2% target over the past two years.

High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. Price hikes are particularly difficult for lower-income Americans, because they tend to spend more of their already-stretched paycheck on necessities and have less flexibility to save money.

Energy costs rose 1.1% in January, a slower pace than the 2.4% reading in December. Gas prices were up 1.8% last month, while natural gas prices increased by the same amount.

Food prices increased 0.4% in January. The food at home index was up 0.5% for the month, with a 15.2% increase in the cost of eggs accounting for about two-thirds of the index's total increase. Prices of fruits and vegetables helped offset some of those increase, falling 0.5% in the month, while cereals and bakery products also decreased by 0.4%.

The food away from home index was up 0.2% in January. Prices for limited service meals were up 0.3% for the month, while full service meals saw a smaller 0.1% increase.

Housing prices rose 0.4% in January and accounted for nearly 30% of the monthly CPI increase. Compared with a year ago, shelter prices are up 4.4%, which the Labor Department noted is the smallest 12-month increase since January 2022.

Transportation costs rose 1.8% in January and are up 8% from a year ago. Car insurance prices were a key contributor, having increased 2% in January and11.8% from a year ago. Airline fares increased 1.2% last month and are up 7.1% from a year ago.

This is a developing story. Please check back for updates.

https://www.foxbusiness.com/economy/cpi-inflation-january-2025

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