the CPI fails to fall below 3% and the underlying remains at 3.9%

the CPI fails to fall below 3% and the underlying remains at 3.9%

The US CPI slowed less than expected in January, to 3.1% after the rise of three tenths to 3.4% registered in December, according to data published this Tuesday by the Bureau of Labor Statistics (BLS) of the US Department of Labor. The January data seemed important to the extent that the growth ones have clearly surprised on the upside at the beginning of the year and now the Federal Reserve is focused on whether this greater boost has also translated into more persistent inflation.

Last Friday there was some expectation with the review of 2023 CPI data that the BLS did. Specifically, the inter-monthly data, keeping the inter-annual readings the same, the ones most observed in the media. However, revisions were minimal. The inter-monthly CPI for December was revised one tenth downward to 0.2%, while the core remained at 0.3%. In October and November the revision was one tenth upwards (up to 0.1% and 0.2% respectively). In these readings, the underlying was left where it was, maintaining the annualized rate for the last quarter of the year at 3.3%.

In a similar exercise carried out last year around this same time, month-on-month inflation rates were revised upwards towards the end of 2022, which meant that the three-month annualized rates of headline and core inflation were revised up to 3.3%. and 4.3% from 1.8% and 3.1%, respectively, explained by ING. So year-end disinflation was revised upward, causing the Federal Reserve to be a little more hawkish. Federal Reserve officials had already announced that they would be watching this Friday’s revisions. This year’s updates come as a relief to them, as inflation moderated rapidly in the second half of last year.


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