On Tuesday, the US Bureau of Labor Statistics announced that US inflation in January was 6.4%, continuing to decelerate but at a slower pace. It is important to note that US inflation ended 2022 at 6.5% and had been expected to slow slightly to 6.2%, so the January figure missed expectations.
This slight slowdown was also reflected in core inflation, which does not include food and energy prices. In January, this came in at 5.6%, down from 5.7% in December, but 5.5% had been expected.
This was attributed to a monthly cost of living increase of 0.5%, in line with the estimates of specialized analysts. According to the BLS report, the housing index was the “largest contributor to the monthly increase in all items.” Food prices (0.5%), gasoline (2.4%), and domestic gas (6.7%) also increased on this measure.
Markets are awaiting the inflation data to evaluate the Federal Reserve’s monetary policy, as after the robust labor market report, it has reinforced its message to continue with its bullish interest rate policy.