MORE FEARS OF FED

Jan. inflate 6.4%

Inflation came in hotter than expected in January, stoking fears that the Federal Reserve will become even more aggressive in its fight to bring down prices.

The January reading of the Consumer Price Index, a closely watched measure of inflation that tracks fluctuations in the costs of everyday goods and services, rose 6.4% compared with the same month one year ago.

On a monthly basis, prices increased 0.5% compared with December, according to the Bureau of Labor Statistics’ release on Tuesday.

Economists had expected inflation to rise by only 6.2% year-over-year and by 0.4% from December to January.

While prices increased, the number marks the seventh straight month that the rate of inflation dropped from the same month a year earlier (7.5%).

Core inflation, a measure that excludes volatile food and energy prices, rose 5.6% year-over-year. On an annual basis, both overall and core inflation increased at their smallest rate since the fourth quarter of 2021.

American households are still under severe financial strain from sky-high grocery bills, rent payments and utilities. Gas prices jumped by 30 cents a gallon in January, according to AAA, adding more pain at the pump for US motorists.

Housing prices were “by far the largest contributor” to the monthly rise, according to the bureau.

The shelter index jumped by 7.9% in January compared with the same month one year ago.

Food costs way up

Grocery prices also stayed uncomfortably high last month. The “food at home” index, which measures the cost of groceries, jumped by 10.1% year-over-year. The overall food index rose by 6.4%.

Egg prices continued to skyrocket, soaring by 70.1% as a severe avian flu outbreak hurts supply. Dairy products jumped 14% and coffee increased 12.8%.

The cost of energy services, such as electricity and utility gas surged by 27.7%.

“There is nothing in this CPI report to deter Fed from staying the course of another quarter-point interest rate hike, but there will still be another round of employment and inflation reports prior to the conclusion of the Federal Reserve’s next meeting,” Bankrate chief analyst Greg McBride said.

Wall Street ended the day mixed. The S&P 500 declined 0.03%, to close at 4,136.17 points. The Nasdaq gained 0.57%, at 11,960.15 points, while Dow Jones Industrial Average declined 0.46%, to 34,089.40 points.