Inflationsurged in January by the most in three months, according to the latest Consumer Price Index released Tuesday.
But despite the monthly increase of 0.5%, inflation continued to slow on a year-over-year basis to 6.4%, according to the Bureau of Labor Statistics. That’s down from December’s 6.5%but higher than economists’ projections of 6.2%, according to Refinitiv.
It’s the seventh consecutive month that annual inflation has declined.
(This DOES NOT mean prices are coming down. Prices are still going up, only at a slower rate, which is still faster than our wage increases, so we will continue to fall behind.)
On an annual basis, food prices remain well above overall inflation rates: Food-at-home prices are up 11.3%, with egg prices up 70% year over year, according to BLS data.
Just 11 days ago, the BLS delivered a shocker of a January employment report that showed the US economy added 517,000 jobs last month and unemployment dipped to a level not seen since May 1969. The monthly job gains could eventually be revised downward, but at nearly three times economists’ expectations, that stellar total underscored that bringing down inflation could be a long, drawn-out battle.
“Inflation has shredded household budgets over the past two years, and not just when it comes to one-off discretionary expenses or special occasions, but for keeping up with day-to-day bills,” he said.
“Until inflation returns to the 2% neighborhood, pressure on household finances will continue.”