Detroit Regional Chamber > Research > Consumer Price Index is Hotter Than Expected in January

Consumer Price Index is Hotter Than Expected in January

February 14, 2024

Axios Detroit
Feb. 13, 2024
Courtenay Brown

The Consumer Price Index rose 3.1% in the 12 months through January — a bigger jump than expected —while the monthly gain sped up, the Labor Department said on Tuesday.

Why it matters: While price pressures have moderated overall, getting inflation completely back to normal may be more difficult than economists anticipated.

By the numbers: The 3.1% rise in overall CPI compares to the 3.4% increase in December.

  • Meanwhile, core CPI — which excludes energy and food costs — rose 3.9% in the year through January, the same increase as December. Economic policymakers see this measure as a better gauge of underlying inflation.
  • On a monthly basis, CPI rose 0.3% after rising 0.2% in December. Core CPI rose 0.4%, up from the 0.3% gain the previous month.

State of play: The inflation slowdown over the past year has so far happened alongside a solid economy — bucking predictions that the U.S. would need to enter a recession for price pressures to ebb. The big question is whether that will continue in 2024.

  • The Federal Reserve is contemplating when and by how much to slash the interest rates that they hiked rapidly in recent years to tamp inflation.
  • In recent days, Fed officials say they want more evidence that the war on inflation is won before lowering interest rates.

The big picture: The Biden administration has been touting recent progress on inflation as it looks to sell its economic agenda.

  • Despite a strong labor market and economy, consumer sentiment has only recently started to rebound and voters still give Biden low marks on the economy.

Go deeper: How the Fed’s inflation fight has changed over the last year

RELATED: View Key Statistics Highlighting the Detroit Region’s Economic Well-Being

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