empty
10.02.2022 06:42 PM
US consumer prices jump strongly in January

US consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years. Such news could spark debate among investors and traders about the size of the Federal Reserve's interest rate hike next month.

This image is no longer relevant

The consumer price index gained 0.6% last month after increasing 0.6% in December, the Labor Department said. In the 12 months through January, the CPI jumped 7.5%, the biggest year-on-year increase since February 1982.

That marked the fourth straight month of annual increases in excess of 6%. Economists had forecast the CPI rising 0.5% and accelerating 7.3% on a year-on-year basis.

Effective with the January report, the CPI was re-weighted based on consumer expenditure data from 2019-2020. The new weights, which are based on spending habits in 2019 and 2020, include changes like a bigger weighting for used cars and trucks - a reflection of how the pandemic changed consumption patterns in the US.

"This is a goods-dominated inflation backdrop," said Tom Porcelli, chief US economist at RBC Capital Markets LLC, who noted that merchandise now has a larger weighting in the CPI. "If the transition from goods to services spending is slower to evolve this year, you could continue to see some additional upward pressure on inflation."

The economy is grappling with high inflation, caused by a shift in spending to goods from services during the COVID-19 pandemic. Trillions of dollars in pandemic relief fired up spending, which ran against capacity constraints as the coronavirus sidelined workers needed to produce and move goods to consumers.

Soaring inflation has reduced purchasing power for households and eroded President Joe Biden's popularity. As many pointed to last year's White House stimulus bill as a key factor in the price rise, Biden's approval ratings took a big hit. This is despite the economy growing at its strongest rate in 37 years in 2021 and the labor market rapidly churning out jobs. Meanwhile, several indicators of wage inflation have risen sharply in recent months.

The Fed is expected to start raising rates in March, to rein in inflation, which has overshot the US central bank's 2% target. However, the amount of the increase remains questionable.

No doubt, the regulator will take into account the impressive rise in inflation. On the other hand, markets are already ready for such news.

Financial markets are predicting a 25% chance of a 50 basis points increase, according to CME's FedWatch tool. However, this figure will now rise, in part because price pressures are intensifying.

Economists, however, believe it is unlikely that the Fed would move so aggressively. They expect the central bank to raise rates by 25 basis points at least seven times this year.

"The Fed does not want to create undue volatility in its first hike, which only makes further increases more difficult," said Scott Ruesterholz, a Portfolio Manager at Insight Investment in New York. "Rather, the Fed would be more likely to guide to an accelerated pace of hikes at consecutive meetings to crack down on inflation."

Food prices rose 0.9% in January, the most in three months, and energy costs also advanced 0.9% on gains in fuel oil and electricity.

Residential electricity costs increased last month by the most in 16 years. From a year ago, food inflation is up 7%, the most since 1981.

Excluding the volatile food and energy components, the CPI increased 0.6% last month after rising 0.6% in December.

In the 12 months through January, the so-called core CPI jumped 6.0%. That was the largest year-on-year gain since August 1982 and followed a 5.5% advance in December.

Rising rents and shortages of goods such as cars, microchips, sports equipment, cosmetics and household chemicals and furniture, with some alarming growth in previously unseen categories such as health services, which have a much greater weight in the PCE deflator, the Fed's preferred price indicator, are fuelling the underlying consumer price index much more than before.

Although imports of goods increased to a record high in December as ships were still able to unload after months of delays due to labour shortages at ports, shortages of goods continue. Vehicle inventories in the wholesale trade rose in December to their highest level in 10 years, reflecting a specific increase in the importance of getting goods to the consumer.

Still, inflation will remain high for a while, in part reflecting the delayed impact of rising wages. Employers are boosting compensation as they compete for scarce workers. There were 10.9 million job openings at the end of December.

Inflation-adjusted average hourly earnings fell 1.7 per cent in January from a year earlier, marking the 10th straight decline.

Shelter costs, which are considered to be a more structural component of the CPI and make up about a third of the overall index, climbed 0.3% from the prior month. The increase reflected the biggest jump in rent of primary residence since May 2001. Owners' equivalent rent also rose. However, the cost of temporary accommodation such as hotels fell by 0.3%, probably reflecting the lower travel intensity of Americans.

Like wage increases, shelter is often considered a "sticky" component of inflation, meaning once prices rise, they're less likely to come back down. A sustained acceleration in structural categories like shelter, rather than surges in volatile CPI components such as energy, presents a more serious threat to the central bank's inflation target.

Still, monthly inflation could slow down in the coming months as supply bottlenecks are removed, as coronavirus infections caused by the Omicron variant subside. However, the process is unlikely to start before May 2022.

Kevin Cummins, one of the leading analysts and economists in the US, believes that the factors that have driven inflation higher in 2021 are only expected to dissipate gradually and are likely to keep pushing inflation higher through the first half of 2022. "We expect that there will be a shift from goods inflation, particularly motor vehicle and commodities prices to more persistent services inflation, such as wages and heavily-weighted rents," he said.

A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits fell 16,000 to a seasonally adjusted 223,000 for the week ended February 5. Economists had forecast 230,000 applications for the latest week. Claims increased from the beginning of January through the middle of the month as Omicron raged across the country. They have dropped from a record high of 6.149 million in early April 2020.

US Treasury yields rose, the dollar gained, and the S&P 500 fell at the opening of trading. A broad sell-off should be expected during this and the next trading session, including in the Asian sector.

Notably, economists underestimated the monthly change in CPI in eight of the last 10 months.

Egor Danilov,
Analytical expert of InstaForex
© 2007-2025
选择时间框架
5
分钟
15
分钟
30
分钟
1
小时
4
小时
1
1
通过InstaForex赚取加密货币汇率变动的收益。
下载MetaTrader 4并开启您的第一笔交易。
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

推荐文章

當投資者在各行業間重新平衡時,波音上升,Best Buy下跌

百思買的股票下跌,因為公司裁減了全年的銷售和收益預測。另一方面,由於其首席執行官宣布計劃提高737 MAX的生產,波音公司的股票價格上漲。

13:49 2025-05-30 UTC+2

5月30日美國市場新聞摘要

S&P 500 指數在開盤時呈上升走勢,但不久後轉跌,因官員澄清先前被推翻的關稅仍將維持,直至上訴程序結果出爐。這削弱了投資者早期的樂觀情緒。

Ekaterina Kiseleva 12:20 2025-05-30 UTC+2

波音上漲,Best Buy下跌:為什麼投資者選擇不同資產下注

週四,美國股市上漲,受益於Nvidia最新財報的強勁表現,同時投資者消化了一項深夜法院的裁決,該裁決恢復了前總統唐納·特朗普的廣泛貿易關稅。 聯邦上訴法院推翻貿易法院的一項最近決定,該決定試圖立即阻止徵收關稅。

Thomas Frank 10:10 2025-05-30 UTC+2

5月29日美國市場新聞摘要

市場對美國國際貿易法院的裁決作出反應,該裁決認為特朗普政府的關稅措施超出了其權力範圍。此決定為S&P 500帶來了新的不確定性,因為投資者正在評估關稅回撤的潛在影響。

Ekaterina Kiseleva 11:15 2025-05-29 UTC+2

股市風暴:Nvidia 股價飆升,道瓊指數下跌,法院推翻特朗普關稅

美國股市指數週三收盤呈下跌態勢,投資者正在消化聯邦儲備局最新政策會議發出的新信號,與此同時,芯片相關股票在交易末段受到了打擊。 Nvidia(NVDA.O)股票在盤後交易中跳升5%,因為季度收入優於預期。

Thomas Frank 10:49 2025-05-29 UTC+2

從Nvidia到小米:當今股票市場增長與衰退的推動因素

週二,美國股市大幅上漲,受益於投資者對風險的重新興趣,這是因為特朗普總統意外暫停貿易威脅,以及消費者信心的急劇上升。 三大美國指數收盤均上升,科技股重的納斯達克指數領漲,受益於“七大奇蹟”——一群專注於人工智能的科技巨頭推動市場動力。

Thomas Frank 12:06 2025-05-28 UTC+2

不冒著經濟衰退風險的人無法減少國家債務?交易者日曆:5月29日至31日

成為全球關注的焦點並「決定地球的命運」——這是Donald Trump最為享受的事情。對於他來說,不斷地製造頭條新聞並使市場動盪不安,而媒體則充斥著最新消息,這是至關重要的。

Svetlana Radchenko 11:47 2025-05-28 UTC+2

5月28日美國市場新聞摘要

S&P 500指數突破了關鍵的5,908點位,這標誌著近期修正的結束,並為進一步的上升打開了空間。若突破5,998的阻力位,將為漲勢提供額外的動力。

Ekaterina Kiseleva 11:25 2025-05-28 UTC+2

5月27日美國市場新聞摘要

美國總統唐納德·特朗普宣布對歐盟進口商品徵收50%關稅,但金融市場的反應較為克制。投資者越來越多地採取“威脅與撤退”策略,看到大膽聲明(經常未能實現)後反而買入股票。

Ekaterina Kiseleva 11:54 2025-05-27 UTC+2

焦點在Nvidia:市場期待季度報告,美元接近連續第五個月下滑

週二,股市出現不同的動態,因為唐納德·特朗普意外推遲了對來自歐盟的商品徵收50%關稅的計劃。此舉只增加了對前美國總統貿易策略的不確定性,也導致了投資氣候的動盪。

Thomas Frank 11:31 2025-05-27 UTC+2
现在无法通话?
提出您的问题,用 在线帮助.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.