
Inflation rose at a higher rate than expected in January as the Consumer Price Index (CPI) rose by 0.3% from December to January and 3.1% over the previous year. Economists had previously predicted a monthly increase of 0.2% with an annual gain of 2.9%.
Inflation was much higher than economists anticipated last month. https://t.co/A9rBMmnYjA
— Forbes (@Forbes) February 13, 2024
According to Fox News, housing costs were the biggest driver of inflation in January. Rent costs were up 0.6% from December and 6.1% from last year. Food costs and grocery costs also continue to rise under President Joe Biden’s leadership.
“It’s important to remember that a lower inflation rate does not mean that prices of most things are falling — rather, it simply means that prices are rising more slowly. Consumers are still feeling the pinch of higher prices for the things they buy most often,” said Lisa Sturtevant, chief economist at Bright MLS.
The goal of the Federal Reserve is to get the inflation rate to around 2% annually. During former President Donald’s Trump time in office, that inflation rate was 1.4%. In the three years since Biden has taken over, the inflation rate has jumped to over 5.0%.
Core inflation is another and possibly more accurate number that economists use to judge how the economy is doing. Core prices exclude the more volatile measurements of food and energy and those prices rose 3.9% annually and 0.4% since December, the largest increase since April 2023.
Inflation has fallen from a peak of 9.1% in June 2022, but the drop has not eased the financial pressures that many American families are facing.
“Overall inflation continues to grind lower, but the drop in core inflation virtually ground to a halt last month, mainly because of shelter prices,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Other service costs remain stubbornly strong, while the food price increases are particularly painful.”
Federal Reserve Chair Jerome Powell is questioning whether the declining inflation numbers are real and sustainable or merely a mirage.
“Is it sending us a true signal that we are, in fact, on a path — a sustainable path — down to 2 percent inflation?” Powell asked rhetorically during a news conference. “That’s the question.”