Hotter January Inflation

2025-02-12 16:45:00 ET

Summary

• The overall Consumer Price Index for January rose by a stronger than expected 0.5 percent, while the core CPI (removing the volatile food and energy components) increased by 0.4 percent.
• While this is only one month’s worth of data and these figures are often volatile, today’s CPI report supports that view that inflation improvements have stalled (albeit at levels well below the peak).
• Today’s inflation figures reduce the already low chances of the Fed easing at the next FOMC meeting in March.

Hotter-than-expected CPI to start the year.

The overall Consumer Price Index (CPI) for January rose by a stronger than expected 0.5 percent (0.3 percent expected), while the core CPI (removing the volatile food and energy components) increased by 0.4 percent (0.3 percent expected). This pushed the 12-month trend rate up to 3.0 percent for the overall CPI and by 3.3 percent for the core. Note that the January CPI reading tends to be stronger than expected in most years. No tariff impacts were reflected in these figures....

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