Shelter and Food Costs Drive U.S. Inflation as Energy Prices Decline
Annual U.S. Inflation Rate Moderates to 3.1%, Reflecting Mixed Price Trends in Key Sectors
The U.S. Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in January, continuing its upward trajectory from a 0.2 percent rise in December, a new report says.
This increment reflected the ongoing economic growth within the United States, according to the Bureau of Labor Statistics (BLS) released on Tuesday.
The report said the cost of shelter and food primarily moved the inflation numbers, with shelter costs rising 0.6 percent and affecting the monthly all items increase. In contrast, energy prices saw a downturn, with the energy index falling 0.9 percent, primarily due to a decrease in the gasoline index.
The BLS report follows a recent remark by top Federal Reserve official Jerome Powell that the Federal Reserve is on track to cut the interest rates this year as inflation is nearing its target rates.
The overall 3.1 percent increase in the all-items index over the past 12 months marks a slightly lower pace of inflation compared to the 3.4 percent increase seen in the previous year. The index for all items less food and energy also rose by 3.9 percent over the past 12 months.
Shelter and Food Index Increases
The shelter index's continuous rise significantly influenced January's inflation figures, contributing to over two-thirds of the monthly all items increase. Alongside shelter, food costs also saw an uptick, with the food index rising 0.4 percent. This rise was equal in both home food consumption and dining out, indicating a broad-based increase in food-related expenses across the country.
Energy Index Decline
In contrast to the increases in shelter and food, the energy sector presented a different scenario. The energy index dropped by 0.9 percent, led by a significant 3.3 percent fall in the gasoline index. This decline in energy costs, particularly in gasoline, slightly counterbalanced the overall inflation trends in other sectors.
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