CPI Inches Up to 6.4%, Real Earnings Down 1.8%
Today’s CPI report showed the seventh straight month, prices decreased on a yearly basis to 6.4% from 6.5%, marking the smallest increase since October 2021. However, inflation rose by 0.5% on a monthly basis, up from 0.1% in December.
Used car prices and medical care declines drove the expected declines last month. However, shelter and energy price increases prevented further falls in headline inflation in Tuesday’s consumer price index report.
Last month’s surprising job report showed that employers hired 517,000 new workers, exceeding economists’ expectations.
High prices have been challenging for Americans for over a year, resulting in a decline in the real value of their income despite historical wage increases. The risk of a recession has also increased due to high inflation.
Breaking down the numbers
- Overall CPI: +6.4% y/y
- Fuel Oil: +27.7%
- Electricity: +11.9%
- Groceries: +11.3%
- Chicken +10.5%
- Milk: +11%
- Eggs: +70.1%
- Bread: +14.9%
- Potatoes: +12.4%
- Baby Food: +10%
- Airline Fares: +25.6%
- Real Average Hourly Earnings: -1.8%
Core CPI, a measure of inflation that strips away volatile food and energy prices, rose last month by 0.4% from December’s 0.3% increase. That put the annual core CPI inflation rate at 5.6%.
Rising shelter costs were the biggest contributor to rising inflation last month and yea, accounting for half of the 0.5% monthly increase in prices and 60% of the 6.4% annual inflation rate, the Labor Department said. Shelter costs rose by 0.7% last month and are up 7.9% from a year ago.