FXstreet.com (Barcelona) - Consumer prices have posted a sharp jump in January in the US fuelled by energy and food prices, according to the latest report released by the US Department of Labor.
Consumer prices have risen 4.3% in January from the same month on the previous year, while excluding energy and food, prices have increased 2.5% on the year.
On the month, Consumer prices have increased 0.4% in a seasonally adjusted basis, with both energy and food prices increasing 0.7% on the month, following decreases of 0.1 and 1.7% respectively in December. Excluding food and energy, consumer prices increased 0.3% on the month.
There have been increases on other products contributing to January's CPI, according to Ian Shepherdson, Chief U.S. Economist at High Frequency Economics: The core was boosted by above-trend increases in apparel (0.4%), medical care (0.5%), education and communication (0.4%), lodging (1.1%) and tobacco (1.1%).
According to Shepherdson, the Core CPI will soften over the next months, but today's data will put pressure on the next Fed monetary policy meeting: One bad month does not make a trend, though, and we remain of the view that a sustained period of soft demand will bring core inflation down, as it always does. But right now the optics are unfavorable and this report will make it much easier for the Fed to ease only by 25 basis points on March 18 - though Feb payrolls could change that.