The latest inflation release confirms the high rate in January
Posted on March 1, 2024

Two months ago, it looked like we were clearly headed to 2% inflation. November inflation, using the measure favored by the Federal Reserve was the lowest in four years. The inflation rate for January was issued yesterday and confirmed a reading earlier in the month. Inflation of 0.4% was four times that of November and the highest in the last 12 months. That one month is an annual rate of 4.8%, but the measure of inflation the Federal Reserve favors tracks to 2.3% annual rate over the past eight months.

 

Going deeper: below I display a table and the same six graphs that I’ve use to follow the trends in inflation.

 

 

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The two most widely-reported measures of inflation are Seasonally-adjusted inflation and Core inflation. These and most all other measures of inflation are reported at about the two-week point in the following month.

 

Seasonally-adjusted inflation increased by 0.38% in January. The rate over the last six months aims at an annual rate of 3.5%.

 

 

Core inflation excludes volatile energy and food components. This is similar to the measure favored by the Federal Reserve. Inflation increased by .39% in January. The last six months aim at an annual rate of 3.7% and the last eight aim at 3.2% inflation.

 

 

Personal Consumption Expenditures (PCE) excluding Food and Energy is the measure of inflation that the Federal Reserve Board favors. Inflation of 0.42% in January was less than the prior January but is greater than any of the last 12 months. The last six months aim at an annual rate of 2.5% and the last eight aim at 2.3% inflation.

 

 

== History of 12-month inflation ==

 

Full-year inflation measured by CPI-U shows that inflation for the last 12 months has been 3.9%.

 

 

== Producer’s Price Index ==

 

The change in producer prices will impact consumer inflation. PPI over the last six months is at a -2.5%. annual rate.

 

== Services ==

The last six months aim at an annual rate of 5.7%.

 

 

 

Conclusion: Monthly inflation in January was 0.4%. The rate for the Fed’s favored measure was the highest in the last 12 months. That’s obviously the wrong direction to the goal of 2% inflation, but the last eight months aim at a 2.3% annual rate.