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The Federal Reserve’s preferred inflation measure revealed prices rose 0.6% in January, higher than expected.
The monthly and yearly numbers came in higher than expectations. Much of the increase came in food and energy prices.
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In yet another sign the battle against inflation is not going to be easy, the Federal Reserve’s preferred inflation measure showed prices rose 0.6% in January as the monthly and yearly increase came in higher than expectations, according to the Bureau of Economic Analysis.
The personal consumption expenditures price index gained 0.6% for the month, compared to estimates of a 0.4% rise. The annual level is now 5.4%, compared to a revised 5.3% in December.
The core personal consumption expenditures price index, omitting often volatile food and energy prices, rose 0.6% for the month and 4.7% on an annual basis. Analysts had been looking for a yearly rate of 4.4%.
All of the levels are well above the Fed’s target for inflation, averaging an annual level of 2%, but the trend and direction of inflation is what ultimately matters. Much of the increase in January came from a pick-up in energy prices, which rose 2%. Annually, energy prices are 9.6% higher, but food prices rose 11.1% from a year ago.