Mortgage interest rates drop in the US 0:50
(CNNBusiness) --
Inflation rose in January to the highest in three months, according to the latest Consumer Price Index, released Tuesday.
Despite the 0.5% monthly increase, inflation continued to slow year-on-year to 6.4%, according to the US Bureau of Labor Statistics (BLS).
That's down from 6.5% in December, but higher than economists' expectations of 6.2%.
It is the seventh consecutive month that annual inflation has decreased.
Monthly prices rose largely because of housing costs, which accounted for nearly half of the increase, the BLS reported.
Higher costs for food, gasoline and natural gas also contributed.
On an annual basis, food prices remain well above general rates of inflation: Household food prices rose 11.3%, and egg prices rose 70% year-over-year, according to BLS data. .
advertising
Excluding food and energy prices, which tend to have higher volatility, the core CPI index rose 0.4% from December, matching the previously seen monthly gain, but moderated on a 5.7% annual basis. % to 5.6%.
Consensus estimates called for basic monthly growth of 0.4% and year-over-year gains of 5.5%.
While economists had expected the first report of the year to show inflation continuing to cool, they were also bracing for some uncertainty.
The US economy added 223,000 new jobs in December, making 2022 a historic year for the labor market
How much money does the Super Bowl move in the US?
2:36
Economy, jobs and inflation
Just 11 days ago, the BLS delivered a shocking January report showing the US economy added 517,000 jobs last month and unemployment fell to a level not seen since May 1969. Monthly job gains could eventually revised downward, but to nearly three times economists' expectations, that stellar total underscored that bringing down inflation could be a long, drawn-out battle.
Federal Reserve Chairman Jerome Powell said as much during an economic debate last week.
“Our message [at the last meeting] really was that this process is likely to take a long time,” he said during a question-and-answer session with David Rubenstein of the Economic Club of Washington.
“It's not going to be smooth, we think.
It's probably going to be bumpy.
So we think we're going to have to do more rate increases, and we think we're going to have to keep policy at a tight level for a period of time."
The January CPI also showed that the Homeless Services Index (a measure closely watched by the Federal Reserve because of its connection to the labor market) rose 0.6% in January and is up 7.2% over the past year. anus.
“The broad-based improvement needed to feel good about where inflation is headed is still lacking,” Greg McBride, chief financial analyst at Bankrate, said in a statement Tuesday.
There is nothing to dissuade the Fed from another quarter-point hike, he added.
“Inflation has wrecked household budgets in the last two years, and not just when it comes to one-time discretionary expenses or special occasions, but to keep up with day-to-day bills,” he said.
"Until inflation returns to 2%, the pressure on household finances will continue."
Inflation
