U.S core CPI posts at 0.2% in January versus December’s 0.1%

The
U.S Bureau of Labor Statistics announced the Consumer Price Index (CPI) on
Thursday. The report cited greater household spending on clothing and rents
that saw an increase in the index in January. Thursday’s data, as per the
experts, suggested that annual inflation in the U.S is likely to continue its
increase toward
the Federal Reserve’s target of 2% in 2020.

The
core CPI (excluding volatile components like food and energy) printed a 0.2%
increase in January as compared to December’s 0.1%. Higher prices in the healthcare
sector, airline tickets, academia, and recreation also contributed to
improvement in the underlying inflation last month.

Core
CPI Increased 2.3% In The Past 12 Months

In
the past 12 months, the core CPI posted a higher 2.3% increase. The core PCE
(personal consumption expenditures) is a prominent measure that the U.S Federal
Reserve uses to get an insight into its annual inflation target of 2%. The core
PCE recorded a 1.6% increase in December. Data for January is to be published
later in February.

In
the past 12 months, the CPI registered a 2.5% increase that marked the sharpest
gain since 2018’s October. Last December, the CPI had recorded a 12-month gain
of 2.3%. Gasoline prices printed a 1.6% decline in January versus December’s
3.1% increase. Food prices noted a 0.2% gain that was reported in line with
December’s reading.

In
terms of owners’ equivalent rent (primary residence), the gain was highlighted
at 0.3%. The increase was capped at 0.2% in the past two months in a row. Shelter
index posted a 0.4% increase last month versus 0.2% in December. In the
healthcare sector, the rise in costs was 0.2% in January as compared to December’s
0.5%. While prices for new vehicles remained unchanged in January after a 0.1%
increase in December, used vehicles and trucks saw a 1.2% decline in prices last
month versus a much small 0.4% drop in December. Lastly, apparel prices were reported
up by 0.7% in January while the surge was capped at 0.1% in December.

Response
In The Forex Market

Thursday’s
economic data added to the list of reports that fueled
strength in the U.S dollar index. The index rose to 98.93 that saw a further
decline in the EUR/USD currency pair in the forex market. Following the release
of data, EUR/USD was reported trading as low as 1.0835. At the time of writing,
the currency pair is exchanging hands at 1.0848.