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Inflation Climbs As Investors Await Retail Sale Data Release

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Prices continued to rise in January, as the consumer price index report released this week indicates that inflation increased by 0.5%, up 6.4% from 2022!

Even more surprising was the “super core” services sector where prices were 4% higher than a year ago – much steeper than expected. This is all being driven mostly by shelter, food and energy costs which have seen across-the-board increases over recent months.

Consumers were feeling the pinch as housing, fuel and gas prices all went up in early 2023.

According to Labor Department data released Tuesday, economists had anticipated a 0.4% boost across the board – but it was even higher than expected at 6.2%.

Prices for everyday items have risen significantly over the last year – with core CPI jumping an impressive 5.6% – and it looks like they’re continuing to grow, up 0.4% this month!

Understanding the CPI or inflation report can have a big impact on currencies; these figures affect your ability to get more from each dollar when exchanging into other currency!

All Items and Less food and energy 2020-2023

Markets took a downturn following the release of news about increasing costs in housing, according to the Bureau of Labor Statistics.

The component that accounts for more than one-third of the index rose 0.7% on the month and was up 7.9% compared to last year – much higher than December’s mere 0.1%. Good thing our wallets are staying indoors these days!

Consumers were feeling the pinch of rising prices in May, with energy and food costs increasing at a faster rate than wages.

This meant workers’ real pay was shrinking month-on-month as well as year on year – making it that much harder to make ends meet.

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Persistent Inflation

Prices were on the decline in recent months, but it looks like inflation isn’t going away anytime soon. Despite cuts to interest rates by the Federal Reserve last summer when prices soared higher than ever before since 1981, things still remain unsteady for what could potentially be an American recession ahead this year.

The US economy has been feeling the effect of forces dragging down inflation, but new figures from January show that there’s still a ways to go.

Generally prices for medical services, airline fares and used vehicles have gone down since last year – though you’ll have to watch out when it comes time for breakfast!

An incredible 70% surge in egg prices over the past 12 months looks like making them an expensive option.

Let’s explore ‘super-core’ inflation to see what hidden gems of financial insights we can uncover. With data and analysis, let’s dive in for a better understanding of consumer spending habits!

The Fed is keeping an eye on core services inflation to help determine the right course of policy.

While housing prices have held their ground and kept a floor underneath overall numbers, that number minus shelter costs has still seen solid growth year-over-year – increasing by 4% in January alone!

Markets are looking for the Fed to increase its borrowing rate by half a percentage point over their next two meetings.

This will give them time to assess how this tightening of monetary policy affects broader economic trends such as inflation, before deciding what further action needs taking should prices not fall back down again. Stay tuned!

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Retail Sales Data. Recession Fears

Wednesday morning at 8:30 a.m. ET, we’ll get the chance to see how retail sales fared in January – economists are predicting that it was an impressive 1.9% increase! Can’t wait to take a look and find out if their expectations were correct…

Although economic headwinds may be on the horizon, it looks like there could still be some strong growth coming our way in early 2023!

In January, the Fed shook things up with its Consumer Price Index (CPI) report. They tweaked their methodology and introduced a new way of calculating owners’ equivalent rent – by focusing on stand-alone rentals rather than apartments!

Analyzing this CPI will take some extra effort because certain components like shelter are given added importance while others such as food & energy have been lightened slightly in terms of influence.

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Author

  • Phyllis Wangui

    Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.