US Inflation Cools to 2.4% as Energy Prices Drop and Core Firms
US inflation eased in January, reflecting a sharp decline in energy costs even as underlying price pressures showed signs of firmness.
Key Takeaways:
- Headline CPI: +0.2% MoM; +2.4% YoY (down from 2.7%)
- Core CPI (ex-food and energy): +0.3% MoM; +2.5% YoY
- Energy: −1.5% MoM; gasoline −3.2%
- Shelter: +0.2% MoM; +3.0% YoY
- Airline fares: +6.5% MoM; used cars: −1.8%
The Consumer Price Index, which measures the change in prices paid by urban consumers for a broad basket of goods and services, rose 0.2% on a seasonally adjusted basis in January, according to the Bureau of Labor Statistics. Over the past 12 months, the gauge increased 2.4%, marking a slowdown from December’s 2.7% pace.
The report, covering more than 90% of the US population through the CPI for All Urban Consumers, offers a comprehensive snapshot of price trends across housing, food, energy and services.
Energy Retreat Offsets Core Firmness
Energy prices fell 1.5% in January, providing the largest offset to broader inflation. Gasoline dropped 3.2% on a seasonally adjusted basis and is now down 7.5% compared with a year earlier. Electricity slipped 0.1% in January, though it remains 6.3% higher than a year ago. Natural gas rose 1.0% on the month and is up 9.8% over the past 12 months.
Excluding food and energy, core CPI rose 0.3% in January, a step up from the prior month’s pace, and increased 2.5% from a year earlier.
Shelter, the largest component of the index, climbed 0.2% in January and 3.0% on a year-over-year basis. Owners’ equivalent rent and rent both rose 0.2%, while lodging away from home edged down 0.1%.
Airline fares jumped 6.5% in January, one of the strongest monthly gains in the report. Personal care increased 1.2%, recreation rose 0.5%, and communication advanced 0.5%. Medical care climbed 0.3%, including a 0.9% rise in hospital services.
Offsetting some of the increases, used cars and trucks fell 1.8%, motor vehicle insurance declined 0.4%, and household furnishings slipped 0.1%.
Food Prices Moderate, Dining Costs Stay Elevated
Food prices rose 0.2% in January, with grocery prices advancing at the same pace and restaurant prices up 0.1%.
Within grocery categories, cereals and bakery products increased 1.2%, dairy rose 0.8%, and meats, poultry, fish and eggs gained 0.2%. Nonalcoholic beverages and fruits and vegetables both rose 0.1%. In contrast, the index for other food at home declined 0.3%.
Over the past year, food prices increased 2.9%. Grocery prices rose 2.1% annually, while food away from home climbed 4.0%. Full-service meals increased 4.7% over the year and limited-service meals rose 3.2%, underscoring continued stickiness in service-related inflation.
Annual Inflation Slows
Headline CPI rose 2.4% in the 12 months through January, cooling from December’s 2.7% increase. Core inflation eased to 2.5% on an annual basis.
Separate measures showed the CPI for Urban Wage Earners and Clerical Workers increased 2.2% year over year, while the Chained CPI advanced 2.2%.
The January report suggests overall inflation pressures are gradually moderating, largely due to energy, even as service categories – particularly shelter and dining – continue to show resilience.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
