January 2025 CPI Report; Inflation Surges Beyond Expectations
The Consumer Price Index (CPI) for January 2025 showed a higher-than-expected rise in inflation, with prices increasing by 0.5% for the month and the annual inflation rate climbing to 3%. Both figures exceeded forecasts, with the core CPI, which excludes volatile food and energy prices, rising 0.4% monthly and 3.3% annually. Shelter costs, which account for about 30% of the overall increase, rose 0.4%, while food prices jumped 0.4% and energy prices climbed 1.1%, driven by a 1.8% increase in gasoline prices.
The Federal Reserve is expected to maintain its current interest rate stance, with market expectations for a rate cut pushed out to September. Fed Chair Jerome Powell emphasized caution, stating that the Fed does not react to short-term data fluctuations and prefers to rely on the Commerce Department’s personal consumption expenditures (PCE) gauge for inflation assessment. The CPI report has complicated the outlook for monetary policy easing, as higher inflation erodes worker paychecks, offsetting gains in average hourly earnings.
Economists noted that the January data reflects persistent inflationary pressures, particularly in shelter and food costs, with egg prices surging 15.2% due to avian flu-related supply disruptions. The report also highlighted rising costs for used cars, motor vehicle insurance, and nonalcoholic beverages. Analysts suggest that the Fed’s cautious approach to rate cuts will likely continue, with inflation risks exacerbated by potential tariff hikes and labor market constraints. Markets reacted negatively to the report, with Dow futures dropping over 400 points and bond yields rising sharply.
Consumer prices rise 0.5% in January, higher than expected as annual rate rises to 3%
The consumer price index was expected to increase 0.3% in January, according to the Dow Jones consensus estimate.
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Inflation rate picked up in January, CPI report shows. Here's what it means for your money.
The Federal Reserve's progress on taming inflation has stalled out. That could mean fewer rate cuts in 2025.
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Stock Futures Falling as Markets Brace for CPI Inflation Report
U.S. stocks were struggling for direction early Wednesday as investors’ focus shifted from tariffs to monthly inflation data. There was no fresh news
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January consumer price index report shows a rise in inflation and prices
New numbers from the January consumer price index report show a rise in gas, eggs and coffee prices. NBC News’ Brian Cheung and Investopedia’s Editor-
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