Whoomp. There it is. Inflation, that is. She’s on the move again.
Inflation climbed to 3% in January, an unexpected jump that puts wrinkles in President Donald Trump’s campaign promise to lower prices “immediately” upon taking office.
Consumer prices, which measures commonly purchased goods, jumped 0.5% from December, the fastest climb since August 2023, according to the US Bureau of Labor Statistics’ Wednesday’s Consumer Price Index (CPI) drop .
And core CPI, which removes the more turbulent food and energy prices, climbed 0.4% from December, the highest jump since April 2023, per the New York Times. Year over year, core CPI rose 3.3%.
“The long national nightmare of inflation isn’t over yet for consumers, businesses, and investors,” Chris Rupkey, chief economist at FwdBonds, wrote in a statement, per CNN. “There could be some seasonality that pushes prices up at a faster clip in January, but today the news for [Federal Reserve] officials is all bad.”
On that last part: Many businesses raise prices at the start of the year, and that’s held particularly true in the years since the reopening of the post-COVID economy, the Wall Street Journal pointed out.
But more than conveying seasonality, the January data highlights the work still to be done in the inflation fight. The biggest issue would be if this report is the start of a longer period of higher-than-expected inflation.
“There’s no question, if we got multiple months like this, then the job is clearly not done,” Austan Goolsbee, president of the Federal Reserve Bank of Chicago, told the New York Times.
“The next three months really are the keys for inflation for the year, assuming we’re not hit with huge shocks from tariffs, immigration or some other unexpected change,” Alan Detmeister, who previously managed price and wage forecasting at the Federal Reserve, told the Wall Street Journal.
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