US CPI Data Suggests Covid-19 Continues to Dampen Inflation— For Now

Consumer prices rose slightly in January, while underlying inflation remained stagnant as the pandemic continues to ravage the US economy.

According to latest data released by the US Labour Department on Wednesday, the consumer price index increased by 0.3% in January, following a rise of 0.2% in the prior month. In the meantime, the core CPI, which measures price changes excluding food and energy costs, increased by 1.4% over the 12-month period, slightly missing economists’ expectations of 1.5%.

Of the notable declines, Food-at-home and Used car prices dropped by 0.1% and 0.9% respectively in January, despite strong demand for both amid the pandemic. Likewise, rent and shelter inflation continues to show signs of a slowdown, falling to the lowest level since August 2011. Rent prices dropped from 1.84% to 1.62% in January on a year-over-year basis, meanwhile shelter inflation declined from 2.28% in December to 2.05% last month — all despite historically-high housing prices…

Notably, Goods inflation skyrocketed in January, reaching the highest level since April 2012, meanwhile service inflation sunk to the lowest since November 2010. In response, US Treasury yields declined following the news on Wednesday, with the benchmark 10-year Treasury note dropping to 1.136%, while the Treasury bond remained at 1.928%.

The latest CPI data points to the growing debate in financial markets regarding the impending path of inflation. Despite the relatively modest January figure, price pressures are expected to inflate over the coming months, especially amid expectations that Congress will likely pass yet another stimulus package. Lawmakers are still debating the size of the next relief package, with President Joe Biden proposing a $1.9 trillion plan — something that many economists are warning will certainly spur a sudden outbreak of inflation.


Information for this briefing was found via the BLS and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Baselode Energy To Acquire Forum Energy: The Merger Of Equals Deal

TriStar Gold: The Revised Castelo de Sonhos Prefeasibility Study

Gold is Up 30%, But the Real Bull Market is Only Starting Now! | Adrian Day

Recommended

ESGold To Expand Mine Building At Montauban In Advance Of Gold & Silver Production

Goliath Resources Expands 2025 Drill Program To 60,000 Metres

Related News

UK Unveils Windfall Tax on Utility Providers as Energy Inflation Soars

As energy expenses become increasingly unsustainable for most UK households, the country’s government on Thursday...

Friday, May 27, 2022, 11:39:00 AM

Shrinkflation, Anyone? Retailers are Finding Clever Ways to Mask Surging Prices

With the downward trend in Treasury yields prompting some analysts to sigh a breath of...

Monday, July 12, 2021, 05:25:00 PM

Annual Inflation Jumps to 2.2% In March

Annual inflation levels across Canada jumped to 2.2% in March, largely due to the drop...

Thursday, April 22, 2021, 10:44:00 AM

Fears Of European Economic Slowdown May Have Been A Key Impetus For The Soaring Equity Markets In July

In July, many stock markets posted their best monthly results since November 2020, and in...

Monday, August 1, 2022, 09:00:00 AM

Argentina Prepares to Hike Rates As Inflation Soars Above 100%

Argentina’s economy continues to spiral into an even deeper crisis. The South American nation’s central...

Wednesday, May 17, 2023, 06:17:00 AM