- ORIGINAL NEWS
Prices rose more than expected in January as inflation won’t go away
- SUMMARY
Inflation rose by 0.3% in January, reaching a 3.1% increase from the previous year.
Shelter prices climbed significantly, causing most of the rise.
Stocks reacted negatively, but wage growth increased when adjusted for inflation.
The Fed has been looking to find the right balance for monetary policy, considering easing interest rates.
However, the higher-than-expected inflation might lead them to be cautious and monitor the data closely.
Core inflation, excluding volatile items like food and energy, also rose by 0.4% while the broader economic picture showed mixed results.
Various goods and services saw price changes, with some items decreasing like used car prices while others like airline fares increased.
Economists had predicted a smaller monthly increase and a lower annual rate.
The market had anticipated rate cuts soon, but the data might delay it.
The Fed will consider this information when deciding how to proceed with interest rates.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“Even with the rise in prices, inflation-adjusted hourly earnings increased 0.3% for the month.”
“In recent days, policymakers including Chair Jerome Powell have said the broader strength of the U.S. economy gives the Fed more time to process data.”
Negative
“Stock market futures fell sharply following the release.”
“Fed officials expect inflation to recede back to their 2% annual target in large part because they think shelter prices will decelerate through the year.”
“inflation rose more than expected in January as stubbornly high shelter prices weighed on consumers”
“The forecast had been for 0.3% and 3.7%, respectively.”