2/14/2023: January CPI was 6.4%

It didn't go down as fast as people thought

January CPI report is out. Overall CPI is 0.5% in January vs. 0.1 % in December while the core CPI rose 0.4% in January vs. 0.4% in December. Overall CPI YoY rose 6.4% in January vs. 6.5% in December and 7.1% in November. Core CPI YoY rose 5.6% in January vs. 5.7% in December and 6.0% in November. According to the CPI news release, shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing.

After 2 months of decrease, gas prices were up 2.4% in January. Food prices remained elevated. The index for meats, poultry, fish, and eggs increased 0.7 percent over the month, as the index for eggs rose 8.5 percent. Eggs have been so expensive and out of stock often.I can’t imagine in America people don’t have enough eggs to eat. But that just happened to me last week. I wonder what’s up with it.

Overall, I am not sure this is whatdisinflation looks like. For everyday expenses, I still feel the prices are going up. Restaurants, kids classes, groceries, home repairs, etc all become a lot more expensive than I expect. The hard numbers presented in this CPI report also confirms my suspicion. It seems in general people are more receptive to price increases so businesses raise prices more aggressively to counter their increasing costs. If every business does that multiple times, this becomes a classic price increase spiral in economics and I am not sure if the price increases are slowing down for essential goods and services. I can buy a couple less purses but I still want my three egg omelet on Sunday. There’s no way I will downgrade to a two egg omelet due to inflation and if most people are like me, inflation will probably take a while to really go down.