January CPI Surges, Exceeding Economists’ Expectations

James Hyerczyk
Published: Feb 13, 2024, 13:39 UTC

In January, the Consumer Price Index unexpectedly rose to 0.3%, indicating stronger inflationary pressures in the economy."


Key Points

  • January CPI rises 0.3%, surpassing 0.2% forecast.
  • Shelter index up 0.6%, major factor in CPI rise.
  • Year-over-year, core CPI holds at 3.9% growth.

January CPI Exceeds Forecasts

January’s Consumer Price Index (CPI) revealed an unexpected surge in consumer prices, exceeding economists’ forecasts. This rise indicates a persistent inflationary pressure in the U.S. economy.

Unexpected Rise in CPI

Eonomists predicted a modest 0.2% rise in the CPI for January, but the actual figures reported by the U.S. Bureau of Labor Statistics showed a 0.3% increase. This jump contributed to an annual rate movement to 3.1%, up from December’s 0.2% rise.

Shelter and Food Index Increases

The shelter index, a significant component of the CPI, saw a 0.6% increase, contributing notably to the overall monthly rise. Food indexes also climbed, with a 0.4% rise both in food at home and food away from home. Notably, the nonalcoholic beverages index spiked by 1.2%.

Energy Index Decline

Contrasting these increases, the energy index dropped by 0.9%. This decrease was largely attributed to a 3.3% fall in the gasoline index.

Core CPI Analysis Excluding food and energy, the core CPI rose by 0.4%. Significant increases were observed in shelter, motor vehicle insurance, and medical care. However, there were declines in used cars, trucks, and apparel.

Annual Comparisons

Year-over-year, the all items index increased by 3.1%, a deceleration from the previous 3.4% increase. The core CPI maintained a steady year-over-year rise of 3.9%. In contrast, the energy index fell by 4.6%, while the food index rose by 2.6% over the last year.

Food Index Detailed Breakdown

Over the past 12 months, the food at home index escalated by 1.2%, with other food at home rising by 2.6%. The food away from home index soared by 5.1%, led by a 5.8% increase in limited service meals.

Energy Index Yearly Overview

Over the past year, the energy index witnessed a 4.6% decline, with gasoline decreasing by 6.4% and natural gas plummeting by 17.8%.

Core CPI Yearly Growth

The index for all items less food and energy observed a 3.9% growth over the past year. The shelter index, being a major factor, surged by 6.0%.

Non-Seasonally Adjusted CPI

The non-seasonally adjusted CPI for All Urban Consumers increased by 3.1% over the past year, indicating an underlying trend in consumer price increases.

Short-Term Market Forecast

The higher-than-expected CPI data suggests continued inflationary pressures, likely influencing upcoming monetary policy decisions. Investors should anticipate potential market volatility and increased scrutiny on future economic data releases for signs of inflation trends.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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