OAN Staff James Meyers
8:22am – Wednesday, February 12th, 2025
US consumer prices were higher than expected in January. This is because inflation showed few signs of slowing down.
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The consumer price index rose 0.5% last month, according to a report by the Bureau of Labor Statistics on Wednesday. This is up from 0.4% growth in December.
Furthermore, in the 12 months from January to January, CPI increased by 3%, up from 2.9% in December.
Meanwhile, economists only expected an increase of 0.3% each month and a 2.9% year-on-year increase.
Core prices, which exclude volatile food and energy prices, rose 0.4% from before in January, up more than expected.
Core figures came in at 3.3% year-on-year, exceeding Factset's expectations of 3.1%.
Furthermore, food prices increased by 0.4% in January. The Food at Home Index increased by 0.5% that month, and 15.2% for egg costs, which accounts for almost two-thirds of the total index increase.
However, prices for fruit and vegetables fell 0.5% in January, while cereals and bakery products also fell 0.4%.
The latest report showing prices are actually being featured could prevent the Federal Reserve from cutting interest rates at any time in the near future.
Since Covid Pandemic, January and February reports usually reveal higher inflation numbers.
Meanwhile, the rise in avian flu has destroyed flocks across the United States and has seen prices rise.
“Some of the bad inflation prints in January are due to one-off factors, such as egg prices rising when bird flu sweeps agricultural industries across the country, or to raise fuel oil prices in Russia. It's like a month of cold sanctions,” Comerica Bank economist. “However, other inflationary pressures look like companies resetting prices higher at the turn of the year to pass the increased costs they felt in 2024.”
“The Fed will look at the January hot inflation print to see price pressures continue to bubble beneath the surface of the economy. This will result in the Fed's trends being at least slower in 2025. In some cases, they will strengthen the reduction in final tax rates. The Fed also monitors the impact of higher tariffs, more restrictive immigration policies, and tax cut plans. All of these policies have the impact of their impacts shattered through the economy. So, everything could increase inflation and the Fed will keep interest rates higher than it is,” added Adams.
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