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US consumer prices rose briskly at the start of the year, a sign of persistent inflationary pressures that could push the Federal Reserve to raise interest rates even higher than previously expected. The overall consumer price index climbed 0.5% in January, the most in three months and bolstered by energy and shelter costs, according to data out Tuesday from the Bureau of Labor Statistics. The measure was up 6.4% from a year earlier.
Excluding food and energy, the so-called core CPI advanced 0.4% last month and was up 5.6% from a year earlier. Economists see the gauge as a better indicator of underlying inflation than the headline measure.
Both annual measures came in higher than expected and showed a much slower deceleration than in recent months. The figures remain far higher than the Fed’s 2% target, which is based on a separate Commerce Department index.
“It’s going to be tough to get inflation down anywhere close to where the Fed would like to see it.”
The data support officials’ recent assertions that they need to hike rates further and keep them elevated for some time, and possibly to a higher peak level than previously expected. The path to stable prices will likely be both long and bumpter The details of the report showed shelterwas “by far” the largest contributor to the monthly advance, accounting for almost half of the rise. Used car prices — a key driver of disinflation in recent months — fell for a seventh month. Energy prices rose for the first time in three months.y. The goods disinflation that has driven the slide in overall inflation in recent months appears to be losing steam, and the strength of the labor market continues to pose upside risks to wage growth and service prices. NN: Inflation is alive and well and the FED is going to raise the shit out of rates. And the country is going into depression and the stock market will crash.