January CPI Report: Inflation Slows

February 14, 2023
a collection of U.S. $1 bills

Inflation is easing but the path to lower inflation will not likely be smooth.

Chief economist at LPL Financial, Jeffrey Roach, on new data reflecting the price of goods and services in the U.S. during January. Some of the top price increases were shelter, gas, and fuel.

Why It Matters: The Consumer Price Index (CPI) measures a mixed basket of costs of goods and services in the U.S. and is used as an important gauge of inflation (high inflation = your dollar buys you less). The costs of goods and services in January was 6.4% higher than last year and 0.5% higher than in December. It is "the seventh straight month of cooling in annual inflation" since the peak of 9.1% in June – which was the highest reading since 1981.

Something To Consider: Inflation is typically higher in January as businesses reset their prices for the new year. One expert said, “If you think the economy is going into a recession in the summer, this is probably your last chance to take a bite of the apple before the economy slows. It’s sort of the last hurrah for price setters.”

For the full report (U.S. Bureau of Labor Statistics)

Inflation rose 0.5% in January, more than expected and up 6.4% from a year ago (CNBC)

by Jenna Lee,