2/13/2024: January CPI Came in Hot Again
January CPI report was out this morning. Headline CPI MoM rose 0.3% in January vs. 0.2% in December while the core CPI MoM rose 0.4% in January vs. 0.3% in December. Headline CPI YoY rose 3.1% in January vs. 3.4% in December, 3.1% in November, 3.2% in October, 3.7% in September, 3.7% in August, 3.2% in July, 3% in June, 4.0% in May, 4.9% in April and 5% in March. Core CPI YoY rose 3.9% in January vs. 3.9% in December, 4% in November, 4% in October, 4.1% in September, 4.2% in August, 4.7% in July, 4.8% in June, 5.3% in May, 5.5% in April and 5.6% in March. The index for shelter continued to rise in January, increasing 0.6 percent and contributing over two thirds of the monthly all items increase. The food index increased 0.4 percent in January, as the food at home index increased 0.4 percent and the food away from home index rose 0.5 percent over the month. Indexes which increased in January include shelter, motor vehicle insurance, and medical care. The index for used cars and trucks and the index for apparel were among those that decreased over the month.
Core CPI MoM actually accelerated to 0.4% in January from 0.3% in December!! This is concerning and is definitely not the good data the Fed is looking for. The March rate cut is now highly unlikely. Inflation on necessities is quite worrisome. It’s happening everywhere: food, car insurance, property insurance, Netflix, PG&E (my electricity and gas provider. This company sucks!), etc. These are categories with sticky prices and if the price increases are normalized, the fight against inflation is far from over.