Inflation came in hotter than expected to start the year, according to the latest Consumer Price Index…(BLS)
- M-O-M: The Consumer Price Index increased 0.6% compared to economist estimates of 0.5%.
- Y-O-Y: The all items index increased 7.5% year-over-year compared to economist estimates of 7.3%.
NOTE: Core CPI is now at 6.0% year-over-year.
Food prices saw a big jump in January up almost one full percentage point at 0.9% for a year-over-year increase of 7.0%…
- Meat, poultry, & fish prices saw the smallest growth for the month (+0.3%) but are still up 12.2% year-over-year followed by cereals & bakery products (+6.8%) and fruits and vegetables (+5.6%).
- The spread between food at home and food away from home continues to grow with the former up 7.4% and the latter up 6.4%.
Energy prices continue to remain elevated with prices up 0.9% for the month and 27.0% for the year…
- Gasoline prices saw zero growth month-over-month but that is little relief as prices are still 40% higher year-over-year (this is down from 49% the prior month).
Used cars & trucks once again saw the biggest monthly increase in the commodity category with a 1.5% jump for the month which puts prices up 40.5% year-over-year
- New vehicles continue to hold the number two spot behind used vehicles with 12.2% growth year-over-year followed by tobacco (+7.0%) and apparel (+5.3%)
Shelter prices continue to rise, however, it was the lowest monthly gain since August 2021 at 0.4% with prices up 4.4% year-over-year…
- Rents were up 0.5% month-over-month and 3.8% year-over-year.
- Ownership was up 0.4% month-over-month and 4.1% year-over-year.
REMINDER: Steve Matthews and Reade Pickert at Bloomberg wrote on Wednesday, “A hotter-than-expected U.S. inflation print would push the Federal Reserve closer to considering its single-largest rate hike in more than two decades.”
- After the report came out Neil Irwin of Axios said on Twitter, “I’m not saying a 50bps hike is going to be on the table in March, but I am saying if Powell wants it to be on the table they need to get moving on communicating that possibility.”