European
equity
markets
fell
in
afternoon
trading
after
January
inflation
data
in
the
US
came
in
higher
than
expected,
shifting
expectations
for
when
the
Federal
Reserve
will
start
to
cut
interest
rates.
The
Bureau
of
Labor
Statistics reported that
the
Consumer
Price
Index
(CPI)
climbed
3.1%
in
January
from
year-ago
level
–
a
decrease
from
December’s
3.4%
rate,
but
well
below
the
January
2023
peak
of
6.4%.
However,
the
January
increase
was
faster
than
economists
had
predicted.
Core
CPI,
which
excludes
volatile
food
and
energy
costs,
rose
3.9%
in
January
over
the
last
12
months
after
rising
3.9%
in
December.
The
CPI
increased
0.3%
in
January
from
month-ago
levels
after
rising
0.2%
in
December.
Core
CPI
increased
0.4%
after
rising
0.3%
in
December.
US
CPI
vs.
Core
CPI
Data
as
of
January
30,
2024
Source:
Bureau
of
Labor
Statistics.
Don’t
Panic,
Inflation
is
Under
Control
Preston
Caldwell,
chief
US
economist
at
Morningstar
said:
“There’s
no
reason
to
panic
in
response
to
today’s
core
CPI
reading
at
0.4%
month
on
month.
The
upside
surprise
was
driven
by
shelter,
where
prices
jumped
0.6%,
but
the
leading-edge
data
continues
to
show
that
shelter
inflation
will
eventually
fall.
Healthcare
inflation
continued
to
accelerate
in
the
CPI,
but
the
PCE
index
uses
a
different
methodology
and
won’t
register
this
increase.
“Altogether,
core
inflation
ex-shelter
is
at
2.3%
annualised
for
the
past
three
months
for
the
CPI
and
will
likely
post
around
1.5%
for
the
PCE.
It
still
looks
like
inflation
is
coming
under
control,
this
month’s
noisy
data
on
shelter
prices
aside.
Any
lingering
possibility
of
a
March
rate
cut
is
eliminated
by
today’s
news,
but
a
May
cut
still
remains
quite
likely
in
our
view.”
January
CPI
Report
Key
Stats
•
CPI
increased
0.3%
for
the
month
after
rising
0.2%
in
December.
•
Core
CPI
rose
0.4%
after
growing
by
0.3%
in
December.
•
CPI
rose
3.1%
year
over
year
after
increasing
by
3.4%
the
prior
month.
•
Core
CPI
increased
3.9%
from
year-ago
levels
after
increasing
3.9%
in
December.
Economists
had
forecast
the
overall
CPI
reading
to
show
an
increase
of
2.9%
on
an
annual
basis
in
January,
and
for
core
CPI
to
rise
3.7%.
For
the
month,
CPI
had
been
forecast
to
rise
0.2%
overall
and
0.3%
excluding
food
and
energy.
Food
prices
rose
0.4%
in
January
after
increasing
0.2%
in
December.
Food-at-home
prices
increased
0.4%
over
the
month,
while
food-away-from-home
(restaurant)
prices
increased
0.5%.
Change
in
Selected
CPI
Components
Data
as
of
January
30,
2024
Source:
Bureau
of
Labor
Statistics.
This
article
was
partially
generated
by
Wordsmith,
an
automated
smart-text
platform,
using
data
from
the
Bureau
of
Labor
Statistics.
The
article
has
been
reviewed
by
Morningstar
editors.
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