Inflation still going strong

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Retail inflation jumped last month as costs for food, gas, and shelter rose, and while the annual increase in prices continued to decline, it was more than expected.

The Labor Department’s Consumer Price Index (CPI) was up 0.5% in January, above December’s revised 0.1% rise and more than economists’ estimates. For the year, the CPI advanced 6.4%, down from 6.5% and the seventh straight monthly drop. The January rate was the lowest since October 2021, although still higher than forecasts.

The core CPI, which leaves out volatile food and energy prices, held steady with a gain of 0.4%. The year-over-year increase fell to 5.6% from 5.7%, also more than anticipated.

Paying for Shelter

Shelter costs added 0.7%, accounting for about half of the overall rise in the CPI in January, and were up 7.9% from the year prior. Food prices were 0.5% higher, and 10.1% above what they were in 2022. Prices for gas jumped 2.4%, only the second monthly advance since the summer. They were 1.5% more than a year ago. 

Prices fell for used cars and trucks (-1.9%), fuel oil (-1.2%), and medical care services (-0.7%).