The key interest rate is now in the range of 4.50 to 4.75 percent.
(Photo: dpa)
New York, Frankfurt The price pressure in the USA eased further at the beginning of the year. Consumer prices rose by 6.4 percent in January compared to the same month last year. The US Department of Labor announced on Tuesday.
In December 2022, inflation was still 6.5 percent – the decline in January is the seventh in a row. Economists had, however, expected a stronger cooling.
In a monthly comparison, i.e. compared to December 2022, prices increased. Inflation rose by 0.5 percent, again slightly more than expected.
Core inflation, which excludes the volatile items of energy and food, rose 5.6 percent compared to January 2022 – the lowest rate since December 2021 – and 0.4 percent compared to December 2022. The expectation was in each case 0.1 percentage points below.
Tuesday’s data complicates the work of the US Federal Reserve (Fed). The job market has recently been unusually strong. The unemployment rate fell to 3.4 percent, the lowest level since 1969 – which in turn puts pressure on wages and prices.
“It’s good that inflation hasn’t picked up, but it’s not slowing down as much as many had hoped, either,” Nada Eissa, an economics professor at Georgetown University in Washington, told CNBC. Inflation can only return to the Fed’s target of two percent if the unemployment rate rises noticeably.
The Fed recently raised interest rates in smaller increments than last summer. At their most recent meeting, monetary authorities raised interest rates by a quarter of a percentage point to between 4.50 and 4.75 percent. After a series of major interest rate hikes, a degree of normality has returned to monetary policy. Nevertheless, Fed Chair Jerome Powell emphasized that interest rates will continue to rise.
Wall Street reacted surprisingly calmly to the inflation numbers. Futures for the Dow Jones, the broader S&P 500 index and the tech-heavy Nasdaq are pointing to a strong start to trading in New York.
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