Americans faced some relief from the steepest price increases in four decades as inflation eased less than expected in January. The first measure of inflation for 2024, the Consumer Price Index, showed prices rose 3.1 percent in the 12 months ended in January, according to data released Tuesday by the Bureau of Labor Statistics. This marks a step back from December’s 3.4% rate and a dramatic cooling from the 6.4% increase in January 2023.
On a monthly basis, CPI rose 0.3% in January, with stubbornly high housing costs accounting for two-thirds of earnings. Consumers got some relief from falling gas prices; however, food prices (which thankfully no longer outpace overall inflation) rose at the highest monthly rate of the year. Despite this small win, monthly food price changes are volatile and can be affected by various factors such as weather and disease, leaving many Americans still struggling to make ends meet.
“Food prices have continued to rise, and that’s a real pain point,” Robert Frick, corporate economist at Navi Federal Credit Union, told CNN. “There’s the rate of inflation that’s going down, but then there’s the weight of inflation that’s continuing to go up.” Economists had expected inflation to ease to 0.2% from December and slow to 2.9% annually, according to consensus estimates. However, headline inflation has risen to 3% or more for 34 straight months – the longest streak since the late 1980s and early 1990s – showing that progress is slow going for many Americans still feeling the pinch of high prices.