US Core Inflation Still Too Warm

US January Core CPI rose 0.3% m/m, meeting expectations but reinforcing that inflation remains too high for the FOMC. Core services inflation spiked 0.6%, likely hardening the stance of Fed hawks despite signs of a cooling labor market.

Key Takeaways

• 1.US Core CPI inflation remains elevated at 0.3% month-over-month (0.28% unrounded), meeting expectations but showing persistent underlying pressure.
• 2.Core services prices (excluding shelter and energy) saw a significant jump of 0.6% m/m, the highest since January of the previous year.
• 3.Persistent inflation breadth and hot services data are likely to keep FOMC hawks focused on restrictive policy despite a weakening job market.

Table of Contents

• US Core Inflation is Still Too Warm
• What drove core goods prices to be flat?
• US INFLATION COMPONENT BREAKDOWN

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