OAN’s James Myers
8:05am – Tuesday, February 13, 2024
The latest inflation report showed that inflation rose more than expected in January, due in part to food and housing costs.
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The Labor Department said Tuesday that the consumer price index, which measures the price of daily necessities including gasoline, food and rent, rose 0.3% in January.
The figure also exceeded Refinitiv economists’ expectations for a 0.2% month-on-month increase and a composite estimate of 2.9%.
Core prices rose as well, rising 0.4%, the biggest monthly increase since April 2023. It also rose 3.9% for the year, both of these numbers better than expected.
Additionally, health and auto insurance prices rose 1.4% month-over-month in January.
“Overall inflation continues to decline, but the decline in core inflation essentially stopped last month, primarily due to shelter prices,” said Robert Frick, corporate economist at Navy Federal Credit Union. ” he said. “Other service costs remain strong, but food price increases are particularly painful. Breaking through the 3% level is proving more difficult than expected.”
Meanwhile, Chairman Jerome Powell said at the most recent Fed meeting that the Fed would not cut interest rates in March because lawmakers did not have enough confidence that inflation would return to a 2% trajectory.
“The last mile to the Fed’s 2% target is always going to be slow, volatile and frustrating,” said Seema Shah, chief global strategist at Principal Asset Management. “However, what today’s report highlights is that unless the labor market and economy cool down, inflation is likely to stop. Although a March rate cut is completely off the table. “If economic activity continues on track and the effects of the last round of Fed tightening finally begin to show, a May interest rate cut could still happen.”
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