US Inflation Touches 3.1% in January 2024. The United States (US) Consumer Price Index or inflation has increased in January 2024 amid a surge in housing rental costs. However, it is still estimated that the Fed’s interest rate cut will be carried out in the first semester of 2024.
The US Department of Labor on Tuesday (13/2/2024) reported that inflation in January 2024 increased by 3.1% (year-on-year/yoy) after previously increasing by 3.4% in December 2023.
Then, on a monthly basis, inflation in January 2024 increased by 0.3% (month-to-month/mtm), which had previously increased by 0.2% in December 2023. Inflation last month was the largest in four months, against the background of there is strength in the labor market and economic resilience.
Meanwhile, housing, which includes rental costs, also contributed more than two-thirds of the increase in inflation. Food prices then also increased 0.4%, the largest in a year due to the winter storm.
US Inflation Touches 3.1% in January 2024. Food inflation also increased 0.4%, recording the biggest increase since January 2023 driven by higher prices for sugar and sweets, as well as fats and oils, fruit and vegetables.
However, January is usually a strong month for inflation readings, as businesses drive price increases at the start of the year, which some economists say is not fully addressed by models used by the government to remove seasonal fluctuations from the data.
Then, economists also pointed out that not all drivers of inflation in January 2024 will be included in the calculation of the personal consumption expenditure (PCE) price index, which is also a measure by the US central bank (The Fed) to measure progress in achieving the 2% target.
Inflation also appears to be slowing, but is not expected to move too quickly to prompt Fed policymakers to start cutting interest rates.