CPI is the measure of change in prices of a basket of goods and services over a period of time
Inflation is nowhere near the Federal Reserve’s target as prices of items grew more than expected, according to the consumer price index (CPI) data released yesterday. The customers are the ones paying.
CPI is the measure of change in prices of a basket of goods and services, like food, housing, transportation and medical care, over a period of time. The Fed uses the figure to monitor inflation and make policy decisions like interest rate hikes and cuts.
What’s the latest CPI?
The CPI grew 0.3% on a month-to-month basis, an increase over last month’s 0.2%, complicating the Fed’s plans to cut interest rates this year.
On a 12-month basis, the CPI fell to 3.1% from a year prior. Though the figure is down from the 3.4% rise in December, it is still higher than analysts’ predictions of 2.9%.
What rose, what fell
Shelter prices, rent and housing costs rose 0.6% on the month, contributing the most to last month's CPI growth.
Electricity costs climbed 1.2%, and airline fares increased 1.4%. Grocery prices have gone up while eating out will cost you roughly 5% more than last year.
Used cars and clothing prices saw a decline in January.
Overall, the uncertainties surrounding inflation’s trajectory in 2024 have Fed officials mulling over interest rate adjustments to tackle inflation. They insist on awaiting further evidence of sustained inflation control before implementing rate cuts.
Meanwhile
The Biden administration seeks to leverage recent progress on inflation to bolster public confidence and have the CPI data work for its economic agenda.