U.S. January CPI Month-on-Month Increase Below Expectations, Fed May Hold Steady

Odaily News According to data released by the U.S. Bureau of Labor Statistics on Friday, the Consumer Price Index (CPI) rose 0.2% month-on-month in January, slightly lower than the 0.3% increase in December and also below the 0.3% expected by economists. Excluding the volatile food and energy prices, the core CPI increased 0.3% month-on-month, slightly higher than the 0.2% rise in December. On a year-on-year basis, CPI rose 2.4%, slowing from 2.7% in December, primarily influenced by a higher base effect from the previous year; core CPI increased 2.5% year-on-year, down from 2.6% in December. The January report for the first time incorporated updated seasonal adjustment factors reflecting price changes for 2025. Economists noted that core CPI data for January often exceeds expectations each year, as the Bureau's models fail to fully account for one-time price increases at the beginning of the year. This month's increase may reflect both this start-of-year effect and the pass-through impact of Trump's broad tariffs. Despite the slowdown in inflation, a stabilizing labor market may lead the Federal Reserve to keep interest rates unchanged for some time. Economists predict that, influenced by the pass-through of import tariffs and last year's depreciation of the dollar, inflation may see periodic rebounds within the year. (Jin10)