The Labor Department released a highly anticipated report on Tuesday, revealing that consumer prices in the U.S. rose slightly more than expected in January. According to the report, the consumer price index rose by 0.3 percent in January, following a marginal increase of 0.2 percent in December - economists had predicted a rise of only 0.2 percent.
The report also depicted a slight easing of the annual rate of consumer price growth, which dropped to 3.1 percent in January, down from 3.4 percent in December. This albeit slower growth rate was more than the 2.9 percent economists had predicted.
The more significant than expected monthly growth in consumer prices can partly be attributed to continued rise in shelter costs, which saw an increase of 0.6 percent in January, following a 0.4 percent increase in December.
Food prices witnessed a 0.4 percent growth within the same period due to higher prices for both home-cooked and restaurant meals, while energy prices saw a decline of 0.9 percent owing largely to a sharp drop in gasoline prices.
When excluding food and energy prices, the core consumer price index rose by 0.4 percent in January, following a 0.3 percent growth in December. Analysts had anticipated growth to be approximately 0.3 percent.
The annual rate of core consumer price in January remained consistent with December's rate at 3.9 percent, although analysts had forecasted a slowdown to 3.7 percent.
This monthly increase in core prices reflects the trend of rising shelter costs coupled with elevated prices for motor vehicle insurance and medical care. Simultaneously, the prices for used cars and trucks and apparel decreased over the month, as per the Labor Department's data.
Finally, the Labor Department is also set to publish a separate report on producer price inflation for January on Friday. Expectations are for producer prices to slightly rise by 0.1 percent following a decrease of 0.1 percent in December. The annual rate of growth for producer prices is also predicted to reduce to 0.6 percent from 1.0 percent.
