Here are five key takeaways from the January CPI inflation report, released Wednesday:
The headline CPI gauge jumped 0.5% from December, the most since August 2023, exceeding all forecasts in Bloomberg's survey of economists. The core index, which strips out food and energy, jumped 0.4% on the month, the highest reading since March, exceeding all but 5 of 73 forecasts. Some economists cited new seasonal adjustment factors as having played some role.
Almost 30% of the total CPI gain came from shelter costs, although both rent and homeowners' equivalent costs rose by notably smaller magnitudes than seen in recent years. Food and energy prices also boosted inflation, with eggs soaring by some 15.2% on the month.
So-called supercore services prices, which strip out housing and had been a focus for the Fed during the decades-high-inflation period, soared by almost 0.8% on the month, in a potential sign that higher wage costs are again feeding through to prices.
Car insurance, a bugbear for many households, again pushed up inflation, with that category rising 2% on the month. Recreation, used cars and trucks, medical care, communication and airfares also were behind January's inflation. On a 12-month basis, the CPI was up 3% and the core CPI climbed 3.3%.
Stock futures and Treasuries tumbled as the release reduced prospects for Fed policymakers to resume cutting interest rates in the next few months. S&P 500 contracts were down 1.1% at 9:19 a.m. in New York, and two-year Treasury yields jumped about 8 basis points, to 4.36%. The Bloomberg Dollar Spot Index was up 0.4%.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
