Inflation cooled but prices hikes still exist

Prices hikes eased off less than expected in January.

Prices hikes let up still offered a hint of relief for Americans who have suffered through some of the steepest prices hikes in four decades.

CPI showed prices rose by 3.1% for 12 months ended in Jan, that marks a step back from December’s 3.4% rate and dramatic cooling from 6.4% increase seen in Jan/2023.

CPI rose by 0.3% in Jan, with stubbornly high shelter costs accounting for two-thirds of the gain, according to the BLS

Tuesday’s CPI report showed that used car prices fell as expected in Jan, tumbling 3.4% on a monthly basis

there’s also a ratchet effect: Once prices go up for that hair cut or vet visit, they don’t typically move back down.

a ratchet effect: once prices go up for vet visit, they don’t typically move back down.

The CPI’s measurement of shelter costs does come with a delay from timing in how BLS captures the data.

the way that BLS captured the data is largely by measuring rental leases as well as the implicit rental value of owner-occupied properties.

Americans’ wage gains are outpacing the inflation, and people are feeling a whole heck of a lot better than they were about the economy.