Inflation Stayed Sticky in January, Keeping Fed Rate Cuts at Bay

U.S.inflation rose to 3 percent in January, strengthening the case for the Federal Reserve to extend a pause on interest rate cuts.The Consumer Price Index unexpectedly ticked higher from a year earlier, data from the Bureau of Labor Statistics showed on Wednesday, up from 2.9 percent in December.

Compared to December, consumer prices rose 0.5 percent, faster than economists had expected.“Core” C.P.I., which more closely reflects underlying inflation by removing volatile food and energy prices, also showed little improvement.It rose 0.4 percent from December, or 3.3 percent on a year-over-year basis.The January data underscored the uneven nature of the central bank’s battle against high prices.

Inflation has subsided drastically since cresting just above 9 percent in 2022, but progress in recent months has been much more sporadic.Last month, price hikes in sectors closely watched by consumers — from groceries to gasoline — offset declines in other categories like clothing and furniture.Grocery prices climbed 0.5 percent compared with the previous month, or 1.9 percent on a yearly basis.That was driven in large part by a nationwide egg shortage caused by an outbreak of avian influenza, or bird flu, which has pushed prices up 15.2 percent over the past four weeks.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.

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