Data: Bureau of Labor Statistics; Chart: Axios Visuals
Inflation moved higher in January: The Consumer Price Index rose 0.5%, while a measure that strips out energy and food rose 0.4%, the Labor Department said on Wednesday.
Why it matters: It’s a warning to the White House and the Fed about inflation’s potential staying power across the economy.
- CPI rose 3% in the year through January, compared to the 2.9% increase in December.
- Core CPI, which excludes food and energy, rose 3.3% over the last 12 months, up from 3.2% the prior month.
The big picture: Inflation progress has been bumpy in recent months, with much uncertainty about how White House policy — including tariffs — might weigh on prices.
- Any tariff effects would not be evident in this report; the 10% tariff on China went into effect in February, as did retaliatory measures.
- The CPI report is compiled throughout the month. The January report covers the final weeks of President Biden’s time in office and the early days of the Trump administration.
What to watch: Federal Reserve chair Jerome Powell, who will appear before Congress again on Wednesday, has said the central bank is in no rush to lower interest rates further, as such uncertainties become more clear.
- “Inflation has moved much closer to our 2 percent longer-run goal, though it remains somewhat elevated,” Powell told lawmakers Tuesday.
Editor’s note: This story has been updated with details on when the CPI data was collected.
