OAN’s James Meyers
8:05 AM – Tuesday, February 13, 2024
In the latest inflation report rates rose more than predicted in January due in part to grocery and housing costs.
The Labor Department said Tuesday that the consumer price index for the price of everyday goods including gasoline, groceries and rent, grew 0.3% in January.
Additionally, the figures came in higher than the 0.2% monthly increase and 2.9% headline figure forecast by Refinitiv economists.
Core prices rose as well, climbing 0.4%, which is the largest monthly increase since April 2023. It also rose 3.9% annually with both of these figures exceeding expectations.
Furthermore, the prices of both health insurance and auto insurance increased in January by 1.4% over the course of the month.
“Overall inflation continues to grind lower, but the drop in core inflation virtually ground to a halt last month, mainly because of shelter prices,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Other service costs remain stubbornly strong, while the food price increases are particularly painful. Breaking the 3% level is proving tougher than expected.”
Meanwhile, Chair Jerome Powell said during the Fed’s most recent meeting that rates will not be cut in March due to lawmakers not having enough confidence that inflation would get back on track to 2%.
“The final mile towards the Fed’s 2% target was always going to be slow, erratic, and frustrating,” said Seema Shah, chief global strategist at Principal Asset Management. “What today’s report does emphasize, however, is that without a cooling of the labor market and economy, inflation progress is likely to come to a halt. A March cut is completely off the agenda, but May could still be in play if economic activity plays ball and finally starts to show the impact from prior Fed tightening.”
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