Inflation continued its seven-month run of easing in January, but it rose more than economists expected.
According to the Labor Department, the consumer price index (CPI) rose 6.4% annually in January, down from 6.5% in December.
On a month-to-month basis, inflation rose 0.5% in January from December.
Meanwhile, core CPI — which excluded energy and food prices — rose 5.6% from a year ago. And it rose 0.4% from December.
While the latest report shows signs of further easing price increases, it exceeded some economists’ expectations. The Wall Street Journal reports economists it surveyed expected inflation to rise 6.2% annually.
Heather Long, an economic columnist for The Washington Post, tweeted, “It’s not hard to understand why Americans are still frustrated [with] this economy when you look at the latest inflation report.”
She noted grocery prices rose 11.3% over the last year, natural gas is up 26.7% from the previous January, electricity rose 11.9% from a year ago, and airfare is up 25.6%.
It's not hard to understand why Americans are still frustrated w/this economy when you look at the latest inflation report:
— Heather Long (@byHeatherLong) February 14, 2023
Groceries +11.3% in past yr
Eating out +8.2%
Natural gas +26.7%
Electricity +11.9%
Rent +8.6%
Airfare +25.6%
Vehicle insurance +14.7%
Pet services +8.4%
Meanwhile, Jason Furman, an economic adviser for former President Barack Obama, appeared on CNBC and panned the report.
“I don’t see how we have inflation much below 3% this year. I don’t see it coming down below that without a decent-sized recession,” Furman said. “And nothing in this number gives me comfort.”
He added, “I think this inflation issue is real. I don’t think it is going away anytime soon, and I think anyone who is overly calm about it is making me nervous.”
Watch the video below:
Former Obama economist Jason Furman DEBUNKS Biden’s talking points on inflation: “Nothing in this number gives me comfort"
— RNC Research (@RNCResearch) February 14, 2023
"This inflation issue is real. I don’t think it is going away anytime soon, and I think anyone who is overly calm about it is making me nervous.” pic.twitter.com/KGl1ETK0ui
The retreat from the 9.1% inflation the country experienced in June 2022 is welcome news.
And the last seven months of decreasing inflation seemed to indicate the country might be on the path to beating price increases — possibly without a recession.
If you look at Twitter for long enough, you will be able to find economists who can tell you why this report is great news or why it is actually horrible.
Either way, having prices 6% higher than they were a year ago, when they were already elevated due to inflation, is still going to put a squeeze on Americans’ pocketbooks. So they may not be too quick to celebrate a 0.1% drop in the topline CPI number. And it would not be ideal or good if January’s report is a sign that the decrease in inflation is starting to level off and it hovers around 6%.