Inflation rises faster than expected in January as high prices persist

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By Megan Henney | FOXBusiness




Inflation rose more than expected in January thanks to a jump in grocery and housing costs, underscoring the challenge of taming price pressures within the economy.

The Labor Department said Tuesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.3% in January from the previous month. Prices climbed 3.1% from the same time last year.

Both of those figures came in higher than the 0.2% monthly increase and 2.9% headline figure forecast by Refinitiv economists.

Other parts of the report indicated that inflation has been slow to retreat. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4%, or 3.9% annually. Both of those figures are slightly higher than estimates.

Altogether, the report indicates that while inflation has fallen considerably from a peak of 9.1%, it remains above the Federal Reserve's 2% target.

High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily affected by price fluctuations.



Housing costs were the biggest driver of inflation last month. Rent costs rose 0.6% for the month and are up 6.1% from the same time last year. Rising rents are concerning because higher housing costs most directly and acutely affect household budgets.

Other price gains also proved persistent in December. Food prices, a visceral reminder of inflation for many Americans, rose 0.4% over the course of the month. Grocery costs also rose 0.4% last month and are up 1.2% compared with the same time last year.

The price of both health insurance and auto insurance also jumped in January, rising 1.4% over the course of the month.

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