The Bureau of Labor Statistics has released new inflation data for January and it is not good. For the fourth month in a row, the rate rose with rising food and energy prices and is also the highest since last June. Donald Trump, who has always blamed the Biden administration for the decline of the U.S. economy (while avoiding reporting data to support his claim), lashed out at his predecessor once again, “Biden inflation up!”
The consumer price index, which captures changes in the value of the most purchased goods and services, reported an overall increase of 0.5 percent from 0.4 percent in December, with a 3 percent inflation rate over the 12 months ending in January. Rising the most was the value of eggs (15.2% higher than in December), due to the avian flu that cut resources in half. Bacon rose 4.1 percent, gas 1.8 percent, and fresh fish 1.6 percent. Only grains, rice, and bread fell 3.3%, 1.4%, and 1.7%, respectively.
While the inflation rate is lower than the 2022 peak, prices still continue to rise rapidly.
Economists focus more on the core index that excludes volatile food and energy prices to assess core inflation, which is more stable. They were puzzled to find that it rose 0.4 percent in one month, resulting in an annual rate of 3.3 percent. This is the figure on which projections for 2025 interest rates can be made, and if this is the trend, they may remain high. The Federal Reserve shares this sentiment. What’s more, the Trump administration’s planned tariffs and cuts are going to affect the market for the worse as well.
Wall Street began lower Wednesday morning, with the Dow down 395 points, the S&P 500 down 1 percent, and the Nasdaq Composite down 1.1 percent but later recovered from the low though still in negative territory.
