US core inflation rises fastest in 8 months

Inflation in the US was 0.3 percent monthly and 3.1 percent annually in the first month of 2024, above estimates. Core inflation also recorded its fastest increase in 8 months. The data, which exceeded expectations, indicated that the Fed's path to combat inflation would be difficult and that interest rate cuts would not begin soon. Inflation in the US exceeded estimates in January. According to data from the US Department of Labor, inflation was 0.3 percent and 3.1 percent annually. The expectation was for inflation to be 0.2 percent monthly and to decline to 2.9 percent annually. Inflation was 0.2 percent monthly and 3.4 percent annually in December of last year. Core inflation, which does not include energy and food prices, increased by 0.4 percent monthly and 3.9 percent annually, the fastest in 8 months during this period. It remained unchanged at 3.9 percent. The expectation was for an annual increase of 3.7 percent. Food prices continued to rise and increased by 0.4 percent monthly. Housing costs also increased by 0.6 percent monthly and 6 percent annually. Energy prices fell by 0.9 percent due to the decline in gasoline prices. The data, which exceeded estimates, reduced expectations that the Fed would soon begin interest rate cuts. Expectations in money markets for the first interest rate cut from the Fed were postponed from June to July. The Fed's next meeting will be held on March 19-20. The bank is not expected to change interest rates at its 5th meeting.