Consumer prices rise 0.5% in January, higher than expected as annual rate rises to 3%

[BumRushDaShow]

Last edited Wed Feb 12, 2025, 11:43 AM - Edit history (1)

Source: CNBC

Published Wed, Feb 12 20258:31 AM EST Updated 27 Min Ago


Inflation perked up more than anticipated in January, providing further incentive for the Federal Reserve to hold the line on interest rates.

The consumer price index, a broad measure of costs in goods and services across the U.S. economy, accelerated a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 3%, the Bureau of Labor Statistics reported Wednesday. They were higher than the respective Dow Jones estimates for 0.3% and 2.9%. The annual rate was 0.1 percentage point higher than December.

Excluding volatile food and energy prices, the CPI rose 0.4% on the month, putting the 12-month inflation rate at 3.3%. That compared with respective estimates for 0.3% and 3.1%. The annual core rate also was up 0.1 percentage point from December.



Markets tumbled following the news, with futures tied to the Dow Jones Industrial Average sliding more than 400 points while bond yields scaled sharply higher.

Read more: https://www.cnbc.com/2025/02/12/cpi-january-2025.html

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From the source -

Link to tweet

BLS-Labor Statistics
@BLS_gov
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CPI for all items rises 0.5% in January; shelter up #BLSData https://bls.gov/news.release/cpi.nr0.htm
8:30 AM · Feb 12, 2025

Article updated.

Previous articles/headline -

Published Wed, Feb 12 20258:31 AM EST Updated 7 Min Ago


Inflation perked up more than anticipated in January, providing further incentive for the Federal Reserve to hold the line on interest rates.

The consumer price index, a broad measure of costs in goods and services across the U.S. economy, accelerated a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 3%, the Bureau of Labor Statistics reported Wednesday. They were higher than the respective Dow Jones estimates for 0.3% and 2.9%. The annual rate was 0.1 percentage point higher than December.

Excluding volatile food and energy prices, CPI rose 0.4% on the month, putting the 12-month inflation rate at 3.3%. That compared to respective estimates for 0.3% and 3.1%. The annual core rate also was up 0.1 percentage point from December.

Markets tumbled following the news, with futures tied to the Dow Jones Industrial Average sliding more than 400 points while bond yields scaled sharply higher.

Published Wed, Feb 12 20258:31 AM EST Updated 6 Min Ago


Inflation perked up more than anticipated in January, providing further incentive for the Federal Reserve to hold the line on interest rates.

The consumer price index, a broad measure of costs in goods and services across the U.S. economy, accelerated a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 3%, the Bureau of Labor Statistics reported Wednesday. They were higher than the respective Dow Jones estimates for 0.3% and 2.9%. The annual rate was 0.1 percentage point higher than December.

Excluding volatile food and energy prices, CPI rose 0.4% on the month, putting the 12-month inflation rate at 3.3%. That compared to respective estimates for 0.3% and 3.1%. The annual core rate also was up 0.1 percentage point from December.

Shelter costs continued to be a problem for inflation, rising 0.4% on the month and accounting for about 30% of the entire increase, the BLS said.

Consumer prices rise 0.5% in January, higher than expected

Published Wed, Feb 12 20258:31 AM EST Updated 4 Min Ago


Inflation perked up more than anticipated in January, providing further incentive for the Federal Reserve to hold the line on interest rates.

The consumer price index, a broad measure of costs in goods and services across the U.S. economy, accelerated 0.5% for the month, putting the annual inflation rate at 3%. They were higher than the respective Dow Jones estimates for 0.3% and 2.9%.

Excluding volatile food and energy prices, CPI rose 0.4% on the month, putting the 12-month inflation rate at 3.3%. That compared to respective estimates for 0.3% and 3.1%.

This is breaking news. Please refresh for updates.

Original article -

Published Wed, Feb 12 20258:31 AM EST


The consumer price index was expected to increase 0.3% in January, according to the Dow Jones consensus estimate.

This is breaking news. Please refresh for updates.

[bronxiteforever]

1. Kick. Everything he touches dies.

Aka our standard of living.

[liberalgunwilltravel]

5. When is he...

Going to touch himself? And while he’s at it, he should touch Elon.

[Lovie777]

2. I don't have much confidence in the stock market..........................

because in my opinion they been off the mark for a while.

[Bernardo de La Paz]

6. Pays to be contrarian, sometimes. Market slow to recognize that tRump is fixated on tariffs & Muck is breaking things

It is at the breakout and breakdown points in markets when it pays to be contrarian. Recognizing them is of course the tough part.

In November there was a lot of market optimism. In December tRump indicated he was serious about tariffs and the market seemed to pause a bit and drift sideways in a trend channel. Barrons and MarketWatch were full of stories like 'switch out of this sector and into that because it's still a good market'. And this comes at the end (at least to this point) of a two year bull market which is longer than median and other indicators like high PE ratios.

Part of this wide optimism is a collective shrug about tariffs and deportations. They are more concerned about interest rate cuts because an expectation of rate cuts is baked into the market prices.

The market may be in a topping phase or a pause before another upside run. I think the risks of holding the former view are lower than holding the latter view. That is a bit contrary now.

[Johnny2X2X]

3. Gee

Who could have guessed that raising prices via tariffs would raise prices?

They'll try to blam Biden, but inflation has been falling for years under Biden and Trump just added a tax to all imports.

[Wiz Imp]

14. Increases due to tariffs haven't even started being reflected yet

Just wait until they are. Part of the reason for the increase in January is the anticipation of what will happen and become necessary once Trump's "policies" are fully implemented. It's not going to be pretty moving forward.

[Johnny2X2X]

15. This is companies preparing for the tariffs

It's risk management. There's uncertainty, so they're stocking up on supply which increases costs.

The system isn't built for shocks like we're seeing.

[Wiz Imp]

17. Right

And when the tariffs themselves kick in, it will be even worse.

[Johnny2X2X]

18. Don't expect the corporate media to talk honestly about it

This will be framed as Biden inflation Trump is trying to rescue us from.

[liberalgunwilltravel]

4. Bend over, MAGAts

You ain’t seen nothing yet.

[mahatmakanejeeves]

7. Dow drops 400 points after hotter-than-expected CPI report: Live updates

Updated Wed, Feb 12 20259:49 AM EST

Dow drops 400 points after hotter-than-expected CPI report: Live updates

Pia Singh
Brian Evans

Stocks dropped after January’s consumer prices reading raised fears about inflation reigniting and caused interest rates to spike. ... The Dow Jones Industrial Average tumbled 459 points, or 1%. The S&P 500 shed 1%, along with the Nasdaq Composite.
.
January’s consumer price index jumped 0.5% for the month, putting the annual inflation rate at 3%. Those figures were much higher than the respective Dow Jones estimates from economists for increases of 0.3% and 2.9%. Excluding volatile food and energy prices, core CPI rose 0.4% on the month and 3.3% for the past 12 months, both higher than expected. ... The 10-year Treasury yield, a benchmark for mortgage rates and other lending, jumped above 4.6% following the data.

A broad sell-off ensued following the release of CPI with most of the S&P 500 indicated to open lower. Consumer shares at risk if rates spike like Home Depot declined, along with bank stocks that could be hurt if the economy slows under the weight of higher rates. Bull market leaders like Palantir were also in the red.

“The hotter than expected CPI confirms investors’ anxiety regarding too-hot inflation that will keep the Fed on the sidelines (as opposed to cutting rates),” Sameer Samana, Wells Fargo Investment Institute head of global equities and real assets, said. “We have been concerned about inflation as a risk for some time, and believe that while risk markets can go higher, it will be a choppier trajectory than the last two years.”

{snip}

[BumRushDaShow]

12. And then the Treasury yield took off

10-year Treasury yield shoots above 4.6% after hot CPI report


Published Wed, Feb 12 20253:53 AM ESTUpdated 2 Hours Ago

Sawdah Bhaimiya



U.S. Treasury yields rose sharply on Wednesday as investors reacted to the hotter-than-expected January consumer inflation report.

The 10-year Treasury yield jumped 9 basis points at 4.627%, while the 2-year Treasury yield rose more than 7 basis points to 4.363%.

Yields and prices move in opposite directions and one basis point equals 0.01%

(snip)

(that breaking banner had popped up just after the Dow 400 pt drop one, which appeared right after the CPI one from CNBC)

[progree]

16. And when bond yields go up, bond prices go down. And Net Asset Values of bond funds go down

It is extremely very rare to see any mention of bonds here at DU, but it is almost universal advice from financial planners and financial pundits that older people should have a considerable allocation in bonds and other fixed income investments (e.g. money market funds and CDs). Jack Bogle of Vanguard used to say "your age in bonds", i.e. a 60-year-old should have 60% in fixed income investments (which include bonds) and 40% in equities.

Most investment advice on allocation that I've seen haven't been that extreme, but something equivalent to "your age in bonds minus 10" or minus 20 is what I've seen. In the latter case, a 60-year-old should have 40% in fixed income and 60% in equities.

I'm a little older and a little less conservative than that, with about 45% in fixed income and 55% in equities. Much of that 45% in fixed income is in intermediate-term bond funds. They have been about breakeven in total return in the last 4 years, but as far as purchasing power, they've been slaughtered.

Today's inflation report, as much as we like the political points we can make about the January jump, is a disaster for bond funds.

(Righties, BTW, will point out that Biden was president for 2/3 of January, and tRump only 1/3 of January. But the counterpoint is since they are claiming the stock market gains since the election (Nov. 5) as the "Trump trade", then for consistency, they should also claim the November, December, and January CPI's which were kinda crummy and rising as the graphs show.)

And my fixed-dollar-amount charitable gift annuity, a source of income about the same in size as my Social Security benefit, has been eroded 24% in purchasing power by inflation since Dec. 2016.

[BumRushDaShow]

19. Well as a retired fed

my annuity is from wherever the government invests it (I am not under FERS but CSRS-Offset so also now get a SS check).

But you guys made be buy one of those I-bonds when the interest rates had peaked (but didn't know you made me do it ).

I still have one EE bond left from 1989. The rest of my EEs were turned in - literally at the Federal Reserve Bank here in Philly when they used to have teller windows open for regular customers back in the day (at some point they stopped that service IIRC). The building lobby was exquisite.

[progree]

8. GRAPHS - 3 month rolling average, and one month - both annualized. CPI and Core CPI

The Last 5 years were revised for seasonal adjustment factors (my graphs' data bases are updated)

News report from the source: https://www.bls.gov/news.release/cpi.nr0.htm
CPI data series: https://data.bls.gov/timeseries/CUSR0000SA0
CORE CPI data series: http://data.bls.gov/timeseries/CUSR0000SA0L1E

I annualize everything to be comparable to each other and to compare to the Fed's 2% target

They are calculated using the actual index values, not from the rounded off monthly change numbers.

What grabs me is that CPI rise averaged 4.5% over the past 3 months on an annualized basis (core CPI: 3.8%)
The January one month increase annualized is: CPI: 5.8%, CORE CPI: 5.5%

The last 3 months (Nov, Dec, Jan) are the "Trump trade" months. Although he wasn't president in November, December, or most of January (inauguration day was Jan 20), the righties claim that the stock market gains since the Nov 5 election are theirs, and call it The Trump Trade. For consistency, they need to own the CPI for those months as well, when businesses scrambled to adjust their inventories and supply chains to deal with -- as best they can -- the expected upcoming trade wars.

REGULAR CPI


CORE CPI = CPI less food and energy


rolling 12 months averages graphs are in the OP

[Old Crank]

9. Trumpflation on the way.

Wait until Powel raises rates instead of holdign steady,

[groundloop]

10. How long before tRump starts faking inflation numbers.

Like he said during his Covid debacle, if we quit testing for Covid we wouldn't have a Covid problem.

[IronLionZion]

20. People can still see the prices when we buy stuff

maybe we can put Trump "I did that" stickers on every fuel pump. If we were petty like that.

[mahatmakanejeeves]

11. From the source:

CPI for all items rises 0.5% in January; shelter up
In January, the Consumer Price Index for All Urban Consumers rose 0.5 percent, seasonally adjusted, and rose 3.0 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.4 percent in January (SA); up 3.3 percent over the year (NSA).

Economic News Release USDL-25-0174

Consumer Price Index Summary
Transmission of material in this release is embargoed until
8:30 a.m. (ET) Wednesday, February 12, 2025

Technical information: [phone] * [e-mail] * www.bls.gov/cpi
Media contact: [phone] * [e-mail]

CONSUMER PRICE INDEX - JANUARY 2025

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent on a seasonally adjusted basis in January, after rising 0.4 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment.

The index for shelter rose 0.4 percent in January, accounting for nearly 30 percent of the monthly all items increase. The energy index rose 1.1 percent over the month, as the gasoline index increased 1.8 percent. The index for food also increased in January, rising 0.4 percent as the index for food at home rose 0.5 percent and the index for food away from home increased 0.2 percent.

The index for all items less food and energy rose 0.4 percent in January. Indexes that increased over the month include motor vehicle insurance, recreation, used cars and trucks, medical care, communication, and airline fares.The indexes for apparel, personal care, and household furnishings and operations were among the few major indexes that decreased in January.

The all items index rose 3.0 percent for the 12 months ending January, after rising 2.9 percent over the 12 months ending December. The all items less food and energy index rose 3.3 percent over the last 12 months. The energy index increased 1.0 percent for the 12 months ending January. The food index increased 2.5 percent over the last year.

------------------------------------------------------------------------------------------------------------
Revised Seasonal Adjustment Factors and Publication Changes

In accordance with annual practice, relative importance values have been updated, and seasonal adjustment factors were recalculated to reflect price movements from the just-completed calendar year. This process results in revisions to seasonally adjusted indexes for the previous 5 years. Revised seasonal adjustment factors and end of year files are available at www.bls.gov/web/cpi.supp.toc.htm.

Effective with this release, several indexes and average price series were discontinued, and one index title was changed. More information is available on the CPI discontinued series page at www.bls.gov/cpi/additional-resources/discontinued-series.htm and the CPI title changes page at www.bls.gov/cpi/additional-resources/series-title-changes.htm.

{snip}

[Wiz Imp]

13. The biggest single-month increase in over a year

The big question is whether BLS will be allowed to publish legitimate numbers for February? No question that inflation for February is going to be even higher than January. I have a feeling the graph for 2025 will end up looking even worse than the graph for 2021 (if only BLS is allowed to continue producing honest data).

[progree]

23. Yes, the last time the monthly increase was higher was August 2023 (17 months before January 2025)

https://finance.yahoo.com/personal-finance/banking/article/5-eggs-and-other-inflation-pain-points-heres-where-prices-are-rising-181129645.html

The month-over-month increase was 0.5% — the largest monthly jump since August 2023.

The above link also has a bar chart of what items have risen and which have fallen over the past 12 months

Plus a discussion of this month's changes as well for several items.

[LilElf70]

21. Wait a minute.................

Didn't our liar in chief promise lower prices on day 1, if he got elected?

Shit, he got me again. One would think "Don't believe this POS. EVER!!!!" (HAHa)

[Wonder Why]

22. The chickens did it. Blame them. On the other hand, any excuse, even one that hasn't started,

like tariffs, can be used to raise prices and enrich the CEOs even more.