WASHINGTON: Rising rent and a gasoline price rebound helped keep US consumer prices elevated in January, according to government data released Tuesday , signalling that policymakers' battle is not over.
With the effects of policy rippling through the economy, the CPI rose 6.4 per cent in January from a year ago, according to Labor Department data. This was a touch below December's figure and the smallest annual increase since October 2021.From December to January, CPI rose 0.5 per cent, picking up from 0.1 per cent in December and indicating the Federal Reserve has some way to go in lowering costs.
He added that latest data"reinforces that we have made historic progress and are on the right track, and now we need to finish the job."There was"only modest improvement" in annual inflation, and in services inflation excluding volatile components and housing, said Rubeela Farooqi of High Frequency Economics."For Fed officials, a slow grind down in inflation only supports the higher-for-longer view on interest rates," Farooqi warned.
He believes that rental costs"won't peak until the second half of this year," while wage growth remains robust and there is still pent-up demand for services spending."During the pandemic, people shifted their spending away from services because they couldn't go out to restaurants, bars, sporting events," he said.