Financial News: U.S. Core Consumer Price Growth Unexpectedly Accelerates I

U.S. Core Consumer Price Growth Unexpectedly Accelerates In January

02/24/2023 - 09:27:00 (RTTNews)

(RTTNews) - A highly anticipated report released by the Commerce Department on Friday showed an unexpected acceleration in the annual rate of core consumer price growth in the month of January.

The report said annual growth by core consumer prices, which exclude food and energy prices, accelerated to 4.7 percent in January from an upwardly revised 4.6 percent in December.

Economists had expected the annual rate of growth by core consumer prices to slow to 4.3 percent from the 4.4 percent originally reported for the previous month.

Including food and energy prices, consumer price growth also accelerated to 5.4 percent in January from 5.3 percent in December. The rate of growth was expected to slow to 4.9 percent.

The inflation readings are said to be preferred by the Federal Reserve, potentially adding to concerns about the outlook for interest rates.

Paul Ashworth, Chief North America Economist at Capital Economics, called the data "another sign that the Fed might have to leave its policy rate higher for longer."

The Commerce Department also said personal income climbed by 0.6 percent in January after rising by an upwardly revised 0.3 percent in December.

Economists had expected personal income to advance by 0.9 percent compared to the 0.2 percent uptick originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, spiked by 2.0 percent in January after climbing by 0.4 percent in December.

Meanwhile, the report said personal spending surged by 1.8 percent in January after edging down by a revised 0.1 percent in December.

Personal spending was expected to jump by 1.3 percent compared to the 0.2 percent dip originally reported for the previous month.

Real personal spending, which excludes price changes, also shot up by 1.1 percent in January after falling by 0.3 percent in December.

Personal saving as a percentage of disposable personal income rose to 4.7 percent in January from 4.5 percent in December.

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