The Consumer Price Index jumped by 6.4% between January 2022 and January 2023 as pricing levels of the staples for American households, such as food and shelter, remain extremely elevated, as expressed in a recent report made public by the Bureau of Labor Statistics.
The 0.5% month-to-month increase far outstripped the forecasts from analysts, while core inflation, which is consolidated by factoring out the highly volatile energy and food categories, jumped 0.4%, also flying past expectations. The prices for food jumped 0.5% and shelter prices shot up by 0.7% even as the prices for energy jumped 2.0%.
“The pace of disinflation has slowed, and if a 0.5% monthly increase in headline and 0.4% in core prices are what passes for progress, we have low expectations,” explained Greg McBride, the Chief Financial Analyst for Bankrate.
The most recent report on price levels comes just a single week after Old Uncle Joe made the claim that “inflation is coming down” as part of his second State of the Union address. “Inflation has been a global problem because of the pandemic that disrupted supply chains and Putin’s war that disrupted energy and food supplies,” he expressed. “But we’re better positioned than any country on Earth.”
The year-over-year inflation reading which came out to be 6.4% in January 2023 constituted a small moderation from the 6.5% level report from this past December. Prices for energy, which showed a drop of 4.5% in the previous month, were the main responsible part for this small bit of disinflation, a trend which now seems to be pulling a 180 as the prices for gasoline and utility gas services jumped 2.4% and 6.7% respectively for January of this year. These elevated fuel costs occur after gasoline prices managed to reach their highest levels on record this past year.
The spike in the cost of food has been especially salient for households attempting to make ends meet. Costs for food at home have climbed 11.3% between January 2022 and January 2023, while at the same time the cost for food away from home has only jumped roughly 8.2% over the same period.
“The broad-based improvement needed to be seen in order to feel good about where inflation is headed is still lacking,” stated McBride. “The leading contributors continue to be categories that are staples of the household budget: food, shelter, electricity, natural gas, apparel, vehicle insurance, and household furnishing and operations.”
“Inflation has shredded household budgets over the past two years, and not just when it comes to one-off discretionary expenses or special occasions, but for keeping up with day-to-day bills,” exclaimed McBride. “Until inflation returns to the 2% neighborhood, pressure on household finances will continue.”
