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• CPI rises by 0.6 % monthly and 6 % on an annual basis, excluding food and energy
• Food prices accelerate 0.9 % in January and 7 % year on year
U.S inflation rise rapidly in January at its highest level in four-decade, as the economic recovery gathered traction and demand outpaced the supply of labor and commodities.
The consumer price index rose 0.6 % in January after rising 0.5 % in December, according to the Labor Department on Thursday.
The CPI increased by a 7.5 % annual rate in January. This was the largest year-on-year gain since February 1982, and it came on the heels of a 7 % increase in December.
The so-called core price index, which excludes food and energy, rose 0.6 percent in January, the same increase as in December while 6 % year on year. This was a substantial increase than the 5.5 % increase in December, and it was the highest rate in the last 40 years.
Dow Jones polled economists predicted that the metric will rise 7.2% year on year.
The increased demand for used cars has been encouraged by the price increase in new automobiles as a result of the worldwide semiconductor-chip shortage, which has pushed up the costs for the former. Used cars and truck prices are up 40.5 %, following a 1.5 % gain last month, contributing to growing inflation.
The index of airline fares and personal care rose 2.3 % and 1 % respectively in January while education increased 0.2 %.
The apparel index increased by 1.1 % in January after positioning at 1.7 % in December, while the index for new vehicles was unchanged over the month which was 1 %.
Food prices jumped 0.9 % in January and 7 % year on year.
Shelter costs, which account for almost one-third of overall costs, climbed 0.3 % month over month and 4.4 % year over year.
In contrast, only a few indexes decreased in January; among those that did were lodging away from home 3.9 % and wireless telephone services 0.1 %.
Meanwhile, a separate report released on Thursday indicated that weekly unemployment claims totaled 223,000for the week ending Feb. 5, a 16,000 decrease from the previous week and fewer than the 230,000 projections.
Picture Credits: Forbes