The “Morning with Maria” panel discusses the U.S. economy and markets after January’s CPI of 3.1% year-over-year.
Inflation rose faster than expected in January as rising rent and food costs raised prices for millions of American households.
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 from the previous month. Prices increased by 3.1% compared to the same period last year.
Both figures beat the 0.2% month-on-month increase expected by Refinitiv economists and the composite estimate of 2.9% growth.
“Inflation is generally moving in the right direction…but it’s important to remember that lower inflation doesn’t mean lower prices for most things,” said Lisa Sturtevant, chief economist at Bright MLS. It’s important.” “Rather, this simply means that prices are rising more slowly. Consumers are still feeling the pinch of rising prices for the things they buy most often.”
Here’s a breakdown of where prices are rising and falling the fastest as Americans continue to battle sticker shock.
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rent
Housing costs remained the biggest driver of inflation last month. Rent increased by 0.6% in the same month, and by 6.1% compared to the same period last year.
Rising rents are a cause for concern, as rising housing costs have the most direct and serious impact on household budgets. (Gabby Jones/Bloomberg/File/Getty Images)
The reason why rent increases are a concern is that Rising housing costs It has the most direct and severe impact on household finances. Separate data showing how much homeowners would pay in equivalent rent if they didn’t buy a home also rose 0.6% from the previous month.
“While overall inflation continues to decline, the decline in core inflation effectively stopped last month, largely due to shelter prices,” said Robert Frick, business economist at Navy Federal Credit Union.
Rising childcare fees are starting to take a toll on our family.
food
Food is one of the most visceral reminders of rampant inflation for Americans. Food prices rose for the 10th consecutive month in January.
A customer buys meat at a Safeway store in San Rafael, California, on April 12, 2023. (Justin Sullivan/Getty Images)
Food prices rose 0.4% over the month, data showed. On an annual basis, prices continued to rise by 1.2% compared to the same period last year.
Egg prices soared 3.4% in January due to the resurgence of bird flu. Consumers also enjoy other products such as bread (0.3%), pork chops (0.4%), juice (1.4%), snacks (0.6%), coffee (0.6%), potatoes (0.9%), and fresh vegetables such as lettuce. are also paying more for staple foods. (1.1%) and tomatoes (4.6%).
However, there was also a significant drop in food prices last month. Prices for milk, meat such as beef and veal, pork and ham, and fresh fruit such as apples, bananas and citrus fruits all fell in January.
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energy
Energy prices fell in January, helping to offset some of the other price increases in the economy. Prices for the month fell by 0.9%, of which gasoline prices fell by 3.3%.
The average cost of a gallon of gasoline fell to $3.07 last month, according to AAA. Prices have risen since then, with the average price hovering around $3.22 a gallon on Tuesday.
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“Consumers are feeling a lot of relief from inflation in categories where prices change quickly, like gasoline and used cars,” said Bill Adams, chief economist at Dallas-based Comerica Bank. “Relief for services with slower price changes has faded, and indeed inflation in these categories remains fairly high.”
Electricity prices rose 1.2% in January, still 3.8% higher than last year.
car
There was some bad news for Americans looking to buy a new car in January.
Used car and truck prices, which were a major factor in the 2022 inflation surge, fell 3.4% in January. (Chandan Khanna/AFP/File/Getty Images)
of new car cost Last month, it rose by 0.2%, a slight increase, and compared to the same month last year, it continues to rise by 0.3%.
But used car and truck prices, which were a key component of the 2022 inflation surge, fell 3.4% in January. Prices remain down 3.5% compared to the same period last year.
Another problem for car owners is rising insurance premiums. Auto insurance rose by 1.4% in January, following an increase in the previous two months. On an annual basis, prices have increased by a whopping 20.6%.
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travel and transportation
Flight tickets continued their upward trend in January, increasing by 1.4% for the month.
A United Airlines Airbus 320 aircraft parks at Dulles Washington International Airport on August 14, 2021, in Dulles, Virginia. (Daniel Slim/AFP via Getty Images/Getty Images)
According to the data, ticket prices have fallen by about 6.4% compared to last year.
