CPI

Consumer prices rose 0.5 percent in January and 6.4 percent annually, according to Labor Department's consumer price index released Tuesday, a jump in ...

[Consumer Price Index](https://thehill.com/tag/consumer-price-index/) [inflation](https://thehill.com/tag/inflation/) [Michelle Bowman](https://thehill.com/people/michelle-bowman/) [Finance](https://thehill.com/finance/) [Finance](https://thehill.com/finance/) [Technology](https://thehill.com/policy/technology/) [Finance](https://thehill.com/finance/) [See All](https://thehill.com/finance/) On the year, grocery prices are up 11.3 percent, energy prices are up 8.7 percent and housing costs are up 7.9 percent, putting a dent in Americans’ finances. The price of used cars is one of the few areas where inflation is easing, with prices dropping 11.6 percent annually after skyrocketing in previous years. Food prices rose 0.5 percent in January, while housing costs rose 0.7 percent, making up for the bulk of the increase. “While there are costs and risks to tightening monetary policy to lower inflation, I see the costs and risks of allowing inflation to persist as far greater,” Bowman said. Consumer prices rose 0.5 percent in January and 6.4 percent annually, according to Labor Department’s consumer price index released Tuesday, a jump in inflation which could encourage the Federal Reserve to further raise interest rates.

Consumer Price Index data released on Tuesday showed that price increases picked up briskly on a monthly basis last month. That was true across both key ...

The data for January showed price increases picking up again on a monthly basis, although the year-over-year numbers continued to show some slowdown in inflation. “Markets are vulnerable in the short-run for that reason.” The prospect of a continued drop in the pace of price rises had raised hopes that the Federal Reserve would soon end its campaign of raising interest rates, which tends to lower inflation but also raise borrowing costs for consumers and companies. Having risen ahead of the data release, futures on the S&P 500, which allow investors to bet on the index before markets officially open, initially moved sharply lower before recovering to trade roughly flat for the day. [its profits fell](https://www.bloomberg.com/news/articles/2023-02-06/tyson-shares-slump-with-falling-meat-prices-hitting-profits?cmpid=BBD021023_TRADE&utm_medium=email&utm_source=newsletter&utm_term=230210&utm_campaign=trade#xj4y7vzkg) in the first quarter as consumers cut back on purchasing its products, especially more expensive items like beef and pork. The average price of large eggs dropped from more than $5 a carton earlier this year to less than $3 in February, the department said. A price index for meats, poultry, fish and eggs increased in January, as did another for cereals and bakery products. Much of the inflation slowdown in recent months has come from a moderation in price increases for goods and commodities. Food prices grew 0.5 over the month, ticking up slightly compared with an increase of 0.4 percent in December. That trend continued in January, with services prices excluding energy continuing to increase rapidly, partly owing to the jump in rental and other housing costs. Goods, including used cars and apparel for women, dropped in price on a monthly basis, but even the slowdown in physical products was less pronounced than it had previously had been. The price index was up 6.4 percent in January compared with a year earlier.

Investors digested the latest consumer price index report and assessed the Federal Reserve's tightening path.

Many investors have been concerned about the pace of rate hikes, and the prospect of rates remaining elevated for longer as they fear this will cause the U.S. A series of Fed officials have indicated that future rate decisions will depend on economic data. [10-year Treasury](/quotes/US10Y/) yield edged up 3 basis points to 3.75%. Economists surveyed by Dow Jones had been looking for respective increases of 0.4% and 6.2%. These measures have included eight interest rate hikes since March 2022. The yield on the [2-year Treasury](/quotes/US2Y/) climbed 6 basis points to 4.60%.

U.S. consumer prices increased from the prior month in January but met expectations, while the underlying trend showed inflation is slowing, likely keeping ...

I think what you're going to continue to see and hear is the market to be unsure about what the Fed does next. "So I don't think any of this necessarily in and of itself changes expectations. “I don’t think (this report) moves the needle for the Fed, and I suspect they’re taking a hard look at the data. "Consensus is now in line with the Fed. "I think (this report) justifies the rise in the two-year yields over the last several weeks and a bit of the resetting in the bond market. So, I think in a lot of ways it’s still very easy to make the case that it looks like inflation will continue to soften as the year progresses and I’m sure this comes as an enormous source of relief at the Fed. So, I think that comes as a big source of relief on some level and in the context of shelter has been doing a lot of the damage from an inflation perspective, particularly over recent months. "I think the bond market is right on the short end that two hikes in the next couple of months are warranted. "The shelter component continues to be such a huge driver of inflation … That said, the market has already re-priced in favor of more tightening from the Fed since the release of Jan payrolls.” “The much longed for, and in several places expected, peak in inflation has been postponed again. The big picture is that the inflation data clearly show that the market is too optimistic about inflation dropping enough this year to allow the Fed to start cutting rates.

Traders work on the floor of the New York Stock Exchange. NYSE. Stocks wavered Tuesday after the January consumer price index report showed that inflation grew ...

[Palantir](/quotes/PLTR/)— Shares jumped 18% on the back of [quarterly results](https://www.cnbc.com/2023/02/13/palantir-q4-earnings-2022.html)that came in ahead of analysts' expectations, according to Refinitiv. CNBC Pro subscribers can see what to expect for the entire week [here](https://www.cnbc.com/2023/02/10/investors-will-have-their-eyes-on-the-consumer-price-index-in-the-week-ahead.html). [Arista Networks](/quotes/ANET/)— The cloud stock advanced less than 1% after reporting earnings and revenue that came in ahead of the consensus estimate set by analysts polled by Refinitiv. [Coca-Cola](/quotes/KO/) beat revenue expectations for the fourth quarter. [Palantir](/quotes/PLTR/) — Shares of the software company surged 18% in extended trading after Palantir reported it made a profit in the fourth quarter, the first GAAP profit in the company's history. "Instead, it reflects a view that the current valuation is difficult to reconcile with the quality of the underlying assets and cash flow power through a cycle." "That of course is how that market feels today and can always change but for now, only the December 2023/January 2024 fed funds futures contract does a rate below 5% show up and barely," he added. [The S&P 500](/quotes/.SPX/) slipped 0.52%, and the [Nasdaq Composite](/quotes/.IXIC/) ticked 0.80% lower. [Restaurant Brands](/quotes/QSR/) — Shares of the Burger King parent dipped 3% after it reported 72 cents in earnings per share for the fourth quarter, two cents below Wall Street estimates, according to FactSet. That was [slightly higher](#107194186-IMfXLRo8U) than economist estimates of the basket of goods and services rising 0.4% on the month and 6.2% on the year, according to a survey by Dow Jones. "That could be the recipe for a soft landing, but it remains to be seen when the Fed will shift away from rate hikes and if the labor market will lose its resiliency." Before the number was released, JPMorgan's trading desk predicted that an annual increase of 6.4% to 6.5% would trigger an S&P 500 loss of about 1.5% on Tuesday.

Tuesday's Consumer Price Index data could hold big clues about the Federal Reserve's future policy moves.

of Anti-Woke, Inc.](https://www.politico.com/news/magazine/2023/02/13/anti-woke-ramaswamy-2024-election-00082414),” is eying the presidency. (Politico) [Chinese technology](https://www.nytimes.com/2023/02/13/business/energy-environment/ford-catl-electric-vehicle-battery.html). (NYT) (FT) (Bloomberg) de la Merced](https://www.nytimes.com/by/michael-j-de-la-merced), [Lauren Hirsch](https://www.nytimes.com/by/lauren-hirsch) and One prominent market watcher even [forecasts](https://www.bloomberg.com/news/articles/2023-02-14/mr-yen-says-ueda-may-raise-rates-by-october-currency-to-gain?srnd=markets-vp) the B.O.J. The carmaker also plans to [cut 3,800 positions](https://www.reuters.com/business/autos-transportation/ford-eliminate-3800-engineering-administration-jobs-europe-2023-02-14/)across Europe as it transitions to E.V. [According to Bloomberg](https://www.bloomberg.com/news/articles/2023-02-13/top-us-china-diplomats-weigh-first-meeting-since-balloon-drama?cmpid=BBD021423_MKTEU&utm_medium=email&utm_source=newsletter&utm_term=230214&utm_campaign=marketseurope), Blinken could speak with Wang Yi, China’s top diplomat, at the Munich Security Conference. The Supreme Court will soon decide a case that asks if algorithms that recommend content to users should be defined as editors. A spokesman for committee Republicans told DealBook that Scott wants to balance the need to protect consumers while promoting innovation, the same position as Toomey.

Stocks were lower in volatile trading Tuesday after data showed consumer prices cooled in January, but at a slower pace than hoped. The Dow Jones Industrial ...

Investors were watching this data to gauge how much more the Federal Reserve will increase interest rates this year to tame rising prices.\n\nSeveral Fed officials spoke following the release of the CPI report Tuesday about where they think interest rates will go from here.\n\nNew York Fed President John Williams said that he is “confident that the gears of monetary policy will continue to move in a way that will bring inflation down to 2 percent. The two-year yield, a barometer for expectations about the federal funds rate, has climbed in February following both Tuesday’s inflation data and a stronger-than-expected jobs report earlier this month.\n\nIn addition to the CPI report, investors will get retail sales data and jobless claims this week, which are important in understanding the strength of the consumer and the condition of the tight labor market. We will stay the course until our job is done.”\n\nPhiladelphia Fed President Patrick Harker said that at some point in 2023, he expects “the policy rate will be restrictive enough that we will hold rates in place and let monetary policy do its work.”\n\nIn an interview with Bloomberg TV Tuesday, Richmond Fed President Thomas Barkin said that the CPI results came in about as expected, but inflation is coming down slowly and “there is going to be a lot more inertia—a lot more persistence to inflation than maybe we’d all want.”\n\nThe Fed tightened financial conditions at a dramatic pace over the past year in a bid to dampen decades-high inflation—a key factor behind last year’s market selloff.

Although inflation continued to ease last month, the CPI report still ensures more rate hikes from the Federal Reserve.

– David Rosenberg, founder and president of [Rosenberg Research](https://www.rosenbergresearch.com/) (opens in new tab) [earnings](https://www.kiplinger.com/investing/stocks/17494/next-week-earnings-calendar-stocks). – John Luke Tyner, portfolio manager at [Aptus Capital Advisors](https://aptuscapitaladvisors.com/) (opens in new tab) [natural gas](https://www.kiplinger.com/article/investing/t015-c008-s001-how-investors-can-bet-on-rising-natural-gas-prices.html) costs and another meaty rise (0.5%) in food costs. – Sal Guatieri, senior economist at [BMO Capital Markets](https://capitalmarkets.bmo.com/en/) (opens in new tab) [Federal Reserve still has work to do](https://moneyweek.com//economy/us-economy/605702/is-us-inflation-accelerating-again-figures-suggest-the-fed-has-further-to) (opens in new tab) to tame inflation. Excluding food and energy, the core CPI increased 0.4% amid a slight pickup in core goods and a solid 0.5% rise in core services prices. – Gargi Chaudhuri, head of [iShares Investment Strategy, Americas](https://www.ishares.com/us/strategies) (opens in new tab) Clothing and vehicle [insurance](https://www.kiplinger.com/personal-finance/insurance/car-insurance) costs also posted outsized gains. Economists surveyed by [Dow Jones](https://www.dowjones.com/) (opens in new tab) were looking for the monthly inflation rate to rise 0.4% last month. "There was more than the usual degree of mystery and intrigue ahead of the January CPI report, given the BLS's reweighting changes (now annually instead of biennially). However, the slowdown in year-over-year inflation decelerated in January and that will probably support our view of the Federal Reserve's (Fed) argument that it is not done raising rates."

While consumer prices climbed at a 6.4% annual pace in January, marking a slowdown from December, the monthly increase sped up to 0.5%.

The consumer price index was expected to increase 0.4% in January from a month ago and 6.2% on an annual basis, according to Dow Jones.

Markets expect the Fed over its next two meetings in March and May to raise its overnight borrowing rate another half a percentage point from its current target range of 4.5%-4.75%. January's CPI report will take some time to analyze, as the BLS changed its methodology in how it reports the index. That number rose 0.2% in January and was up 4% from a year ago. The Fed also changed how it computes an important component called owners' equivalent rent, a measure of how much property owners could get if they rented. "If retail sales also show strength tomorrow, the Fed may have to increase their funds rate target to 5.5% in order to tame inflation." There's widespread belief that the economy could tip into at least a shallow recession later this year or early in 2023. The component accounts for more than one-third of the index and rose 0.7% on the month and was up 7.9% from a year ago. "Inflation is easing but the path to lower inflation will not likely be smooth," said Jeffrey Roach, chief economist at LPL Financial. That has come despite Federal Reserve efforts to quell the problem. The CPI had risen 0.1% in December. Rising prices meant a loss in real pay for workers. economy in danger of slipping into recession this year.

Prices rose 6.4 percent in January compared to the month before, but rose month over month. The Federal Reserve will keep raising interest rates.

A top concern is that the remaining sources of inflation — many of which are tied to the hot labor market and rising wages — will be difficult to tame. It’s probably going to be bumpy.” He said that that expectation was confirmed by the unexpectedly hot January jobs report and that if the economic data “continued” to come in stronger than expected, “we would certainly raise rates more” than officials anticipate now. And Goldman Sachs cut the probability that the U.S. Now the Fed is more focused on a narrow measure of inflation that looks at certain services, including education, medical care and hospitality, where wage pressures and labor shortages can keep pushing prices up. The Fed’s base policy rate, known as the federal funds rate, sits between 4.5 and 4.75 percent, a level that is steep enough to slow the economy. “And that is something that is just going to affirm their commitment to continue raising rates at least two times.” Fed leaders are planning for a few more increases of that scale, and then they’ll hold for a while and let high the higher rates take hold. But the Fed keeps repeating that its raising of interest rates to slow the economy is far from over, and there is much that could thwart its future efforts. Rent in January was up 0.7 percent over the month in comparison with 0.8 percent in the previous report. No part of the Fed’s job until now has been easy, and the central bank had to scramble to get inflation down from 40-year highs last year. That’s the good news,” said Douglas Holtz-Eakin, former head of the Congressional Budget Office and the president of the conservative American Action Forum. But finishing the job requires targeting some of the most persistent sources of inflation and keeping the pressure on.

Bond traders are keeping their expectations for medium-term US inflation at elevated levels as signs of persistent price pressures suggest the Federal ...

While the rise in the consumer price index for January matched consensus estimates, revisions left year-on-year rates higher than economists expected. The report showed disinflationary momentum in core goods is flagging. Bond traders are keeping their expectations for medium-term US inflation at elevated levels as signs of persistent price pressures suggest the Federal Reserve has more to do in terms of tightening policy.

The Nasdaq rose nearly 0.6%, while the Dow declined 0.4% and the S&P 500 ended Tuesday's session with a minor loss. Slowing sales sent shares of Coca-Cola (KO) ...

[yield on the 10-year Treasury note](https://www.investopedia.com/terms/t/treasury-yield.asp) higher. Most major [cryptocurrencies](https://www.investopedia.com/terms/c/cryptocurrency.asp) posted solid gains. [KO](https://www.investopedia.com/markets/quote?tvwidgetsymbol=KO)) shares slipped as the soft drink maker's sales volume fell and it forecast slowing sales growth this year. Nvidia ( [NVDA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NVDA)) shares jumped after a Bank of America analyst gave the stock a "buy" rating because of the company's leadership in making chips for [artificial intelligence (AI)](https://www.investopedia.com/terms/a/artificial-intelligence-ai.asp) applications. Shares of another software provider, Palantir Technologies ( [PLTR](https://www.investopedia.com/markets/quote?tvwidgetsymbol=PLTR)), soared 21% as the company announced its first-ever quarterly profit. [NSC](https://www.investopedia.com/markets/quote?tvwidgetsymbol=NSC)) dropped as the railroad detailed plans to clean up a toxic chemical spill from a train derailment in Eastern Ohio earlier this month. Tesla ( [TSLA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=TSLA)) was the best-performing stock in the S&P 500 on indications that a deal with Mexico may be in the works for the electric carmaker to put a factory in that country. Leidos Holdings ( [LDOS](https://www.investopedia.com/markets/quote?tvwidgetsymbol=LDOS)) shares tumbled after the defense contractor's outlook for full-year profit missed estimates. Aptiv PLC ( [APTV](https://www.investopedia.com/markets/quote?tvwidgetsymbol=APTV)) shares took off as the auto parts supplier predicted that its sales and [operating income](https://www.investopedia.com/terms/o/operatingincome.asp) will soar because of demand for electric vehicles. [consumer inflation](https://www.investopedia.com/consumer-prices-rose-more-than-expected-in-january-2023-7109395) rose more than anticipated in January, raising fears of more Fed interest rate hikes. [CDNS](https://www.investopedia.com/markets/quote?tvwidgetsymbol=CDNS)) gained after the software maker posted better-than-expected results and full-year guidance. [BA](https://www.investopedia.com/markets/quote?tvwidgetsymbol=BA)) shares advanced more than 1% as Air India made a major [passenger jet purchase](https://www.investopedia.com/boeing-airbus-air-india-deal-7109476).

The increase in the consumer-price index, a closely watched measure of inflation, edged down from 6.5% in December, the Labor Department said Tuesday. That ...

[Kohl's Coupon 30% off sitewide](https://www.wsj.com/coupons/kohls) [Wayfair coupon $20 off](https://www.wsj.com/coupons/wayfair) That marked the seventh straight month of easing inflation since

Eggs top all food-at-home price increases at 70.1%, but wholesale prices decline.

There were double-digit gains across almost all subcategories, led by a 32.5% increase in the price of butter and margarine. “To help consumers stretch their food dollar, grocers have dramatically increased investment in their store brand offerings, among other strategies,” he said. Prices for beef and veal were down 1.2% vs. a year ago, for example, and bacon was down 3.9%. On a monthly basis, egg prices were up 8.5% over December 2022 levels. Non-alcoholic beverages were up 13.1%. Among other major categories covered in the January CPI report, prices for fruits and vegetables were up 7.2% for the year, with double digit increases for fresh potatoes and lettuce and for all processed fruits and vegetables subcategories. Department of Agriculture said in a Overall, the meats, poultry, fish, and eggs category saw price increases of 8.1%, however, led by eggs and poultry, the latter of which was up 11.2% for the year. Every single subcategory in the cereals and bakery products category was up in double digits over the last 12 months, led by flour and prepared flour mixes, which were up 20.4%. Although egg-price inflation continued to stand out, prices for some products in the meat, poultry, fish, and eggs category have continued to decline in recent months. Among the major grocery categories, cereals and bakery products led the price increases in this month’s food-at-home index, with prices up 15.6% over the last 12 months, followed by dairy and related products, up 14%.

With new data showing inflation has been stronger than previously reported, the Fed is seen keeping rates higher, longer.

According to the CME FedWatch Tool, the majority of market participants expect the federal-funds effective rate target to rise to 5.50% this summer, up from a high of 5.25% that was widely expected earlier in the month. Core PCE inflation averaged a 2.9% annualised rate in the three months ended in December, Caldwell says. In January, energy prices rose 2.0% over the month as gasoline prices rose 2.4% and utility (piped) gas services prices rose 6.7%. The latest data has prompted a shift in expectations for the Fed raising rates higher and holding them in place longer. Excluding shelter costs, the rest of core CPI has averaged just 1.5% annualised over the past three months, according to Caldwell. Previously, core CPI averaged a 3.1% annual rate in the three months through December, according to Caldwell, "but the BLS now estimates it at 4.3%." "This year, the revisions were quite large, as the pandemic has produced large changes in the seasonal pattern of price changes." "Although new data shows a lesser decline in core inflation at the end of 2022 than previously thought, we shouldn’t be overly discouraged," Caldwell says. In addition, much of the attention hasn’t been on the January CPI report itself but on the picture painted by routine revisions to 2022′s inflation data. Core CPI, which excludes the volatile food and energy components, rose 0.4% in January, also in line with forecasts. The Bureau of Labor Statistics reported an overall rise of 0.5% in the Consumer Price Index for January, in line with consensus estimates, for its fastest month-over-month reading since October 2022. While the trend toward lower inflation appears to be still on track, it’s not just the direction of inflation that matters to the outlook for the economy, markets, and Federal Reserve policy but also the levels.

This Tuesday, the U.S. consumer price index (CPI) reported a slightly smaller decrease in annual inflation than was forecasted by economists. Tuesday's CPI ...

[Download Q.ai today](https://refer.tryq.ai/NASMe93mrxb) for access to AI-powered investment strategies. [ Inflation Kit](https://learn.tryq.ai/blog/inflation-kit?utm_campaign=Forbes&utm_medium=article&utm_source=Forbes). Our AI-powered model rebalances its holdings between Treasury Inflation Protected Securities (TIPS), precious metals, and a basket of commodities, every week, based on AI performance and volatility predictions. As CPI data has shown inflation to have peaked last June, the Fed has since taken its foot off the brakes. Until the labor market shows signs of weakening, demand is likely to stay high, and the Fed will need to continue hiking or maintaining restrictively high interest rates. This makes inflation unlikely to go away quickly and quietly. Just a few months ago, Fed officials projected a terminal rate of 4.6%, and this has steadily crept up. Williams, the New York Fed’s president and CEO, said on Tuesday that a year-end federal funds rate of 5.00%-5.50% seems reasonable. [Download Q.ai today](https://refer.tryq.ai/85JwyBYmrxb) for access to AI-powered investment strategies. Since March 2022, the Federal Reserve has raised interest rates from practically zero to their current range of 4.50%-4.75%. is far from out of the woods. consumer price index (CPI) reported a slightly smaller decrease in annual inflation than was forecasted by economists.

Moderating inflation may not be enough to keep the Federal Reserve from continuing rate hikes, as the latest consumer pricing index released Tuesday showed ...