Inflation turned higher to start 2023, as rising gas and fuel prices took their toll on consumers, the Labor Department reported Tuesday.
The consumer price index, which measures a broad basket of common goods and services, rose 0.5% for the month, which translated to an annual gain of 6.4%. Economists surveyed by Dow Jones had been looking for respective increases of 0.4% and 6.2%.
Excluding volatile food and energy, core CPI increased 0.4% monthly and 5.6% from a year ago, against respective estimates of 0.3% and 5.5%.
Rising shelter costs accounted for about half the monthly increase, the Bureau of Labor Statistics said in the report. The component accounts for more than one-third of the index and rose 0.7% on the month and was up 7.9% from a year ago.
Energy also was a significant contributor, up 2% and 8.7% respectively, while food costs rose 0.5% and 10.1% respectively.
Rising prices meant a loss in real pay for workers. Average hourly earnings fell 0.2% for the month and were down 1.8% from a year ago, according to a separate BLS report.
While price increases had been abating in recent months, January’s data shows that inflation is still a force in a U.S. economy in danger of slipping into recession this year.
That has come despite Federal Reserve efforts to quell the problem. The central bank has hiked its benchmark interest rate eight times since March 2022 as inflation rose to its highest level in 41 years last summer.
In recent days, Fed Chairman Jerome Powell has talked about “disinflationary” forces at play, but January’s numbers show the central bank probably still has work to do.
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