US CPI picks up more quickly than expected in January
By Alexander Bueso
Date: Thursday 10 Feb 2022
(Sharecast News) - The cost of living in the US picked up more quickly than expected at the start of 2022 amid broad-based gains among the various categories of goods and services.
According to the US Department of Labor, in seasonally adjusted terms, the Consumer Price Index advanced at a month-on-month pace of 0.6% (consensus: 0.5%) in January.
That pushed the annual rate of CPI from 7.1% in the month before to 7.5% (consensus: 7.3%).
Food and energy prices both jumped at a 0.9% pace on the month.
At the core level meanwhile, which excludes food and energy prices, CPI advanced at an annual pace of 6.0% (consensus: 5.9%).
In December core CPI had risen at an annual clip of 5.5%.
New vehicle prices were unchanged in comparison to December, but those for used cars and trucks continued to bound ahead, rising by 1.5%.
Apparel prices meanwhile rose by 1.1%, those of medical care commodities by 0.9% and those of transportation services by 1.0%.
In an immediate reaction, the yield on the benchmark 10-year US Treasury note increased by seven basis points to 1.986%, but as of 1343 GMT was last trading at 1.973%.
"Today's numbers likely will re-embolden the hawks seeking a rapid balance sheet run-off, though the loudest voices do not necessarily have the biggest influence on policy," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"We still expect the first rate hike to be 25bp."
Shepherdson's forecasts called for a peak in core US CPI near 6.5% in March, followed by a rapid decline.
In particular, he noted the flat new vehicle prices following eight consecutive monthly gains and said that unchanged prices in January were the result of rising supplies of semiconductors, going on to predict outright falls in prices over the next few months.
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