US consumer prices came in hotter than expected in January as inflation showed few signs of weakening, dashing hopes for interest rate cuts in the near term.
The Consumer Price Index rose 0.5% last month — an increase from December’s 0.4% growth, the Bureau of Labor Statistics said on Wednesday.
In the 12 months through January, the CPI grew 3%, up from 2.9% in December.
Economists polled by FactSet had expected a 0.3% monthly increase and 2.9% year-over-year growth.
Core CPI — which excludes volatile food and energy prices — grew 0.4% in January from the month before, also rising more than expected.
The core figure came in at 3.3% year-over-year, above FactSet expectations of 3.1%.
Economists had expected Wednesday’s CPI report to show few signs of inflation cooling, but the indication that prices are actually picking up will likely keep the Federal Reserve from cutting interest rates anytime soon.
The inflation report shows a growing distance from the Fed’s 2% goal, and the case could even be made in favor of rate hikes.
Since the pandemic, January and February reports have typically shown hotter inflation figures.
Producers tend to raise prices at the beginning of the year, and recent minimum wage hikes across 21 states could also be contributing to higher prices.
Meanwhile, a rampant avian flu has devastated flocks across the US and sent prices soaring.
The national retail price for caged large white eggs jumped about 25% in January from the month before, according to the US Agriculture Department.
