U.S. Inflation Report: Prices Increase More Than Expected

February 13, 2024

Consumers are still feeling the pinch of higher prices for the things they buy most often.

Chief economist at Bright MLS Lisa Sturtevant on the United State Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) report for January, a key report providing an important read on inflation.

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 report reflected prices increasing 0.3% from December to January, and 3.1% over the past year (an annual reading slightly down from December). Core inflation (“core CPI”) – seen as a better data point because the measure strips out volatile energy and food prices – showed prices increasing annually at the same rate as December – by 3.9%. Both annual readings on inflation remain above the U.S. Federal Reserve’s goal “targeting an annual inflation rate of 2% …” (Investopedia).

Rising shelter costs were the largest contributor to the elevated readings, while price increases were also seen in food categories, medical care and electricity costs; meanwhile, costs for gasoline, clothing and used vehicles decreased.

Big Picture: Sturtevant explained, “Inflation is generally moving in the right direction. But it’s important to remember that a lower rate does not mean that prices of most things are falling — rather it simply means that prices are rising more slowly.” The new data on inflation follows other reports that paint a complex picture on the health of the U.S. economy. Learn more HERE.

Read More: Prices rose more than expected in January as inflation won’t go away (CNBC)

Consumer Price Index Summary (U.S. Bureau of Labor Statistics)

by Leah Grainery, based in Texas