13 February: Modest Fall Dashes Hopes Of Spring Rate Cut
Headline US inflation dipped to 3.1% in the year to January 2024 – a smaller fall than forecast – reducing the chances of an early reduction in borrowing costs across the Atlantic, writes Andrew Michael.
The UK inflation figures for January will be published tomorrow (Wednesday). The figure for the year to December was 4%.
Today’s official figures from the US Bureau of Labor Statistics show that its Consumer Price Index (CPI) for All Urban Consumers measure rose by 0.3% in January itself, slightly more than the 0.2 percentage point increase recorded in December 2023.
Explaining the data, the Bureau said that shelter (rental) costs continued to rise in January, contributing more than two-thirds of the monthly all-items increase. Food prices also increased last month, although the overall effect of these two elements was offset by a fall in energy prices prompted by a decline in the cost of fuel in January.
According to the Bureau, core CPI, which omits volatile food and energy prices, rose by 0.4% in January, compared with a 0.3 percentage point increase a month earlier.
The Bureau added that, over the year to January this year, core CPI, which is regarded as a reliable pointer to longer-term inflation trends, rose by 3.9%, the same level as reported a month earlier. Market watchers had been expecting a core CPI figure of 3.8% and a headline CPI figure of 2.9%.
The US Federal…
