The United States’ core consumer prices managed to steer in a great amount of bullish run as the year started; the prices managed to tally a whopping 11-month increase last December which continues this January.
The gains were amidst the eruption of higher and higher rental accommodation costs and the health care prices. Reports also revealed that increasing Consumer Price Index means a massive inflation momentum growth by this year and this, in return, will eventually push the Federal Reserve to reevaluate the next interest rate hike.
CPI Numbers and Figures
According to the recent data for the Labor Department, the Consumer Price Index managed to extend its gains and tally another 0.3% increase last month. The increase excludes the extremely volatile prices of food and even energy components. This is the largest leap the CPI has experienced since January of the same year.
All-in-all, the total so-called core CPI managed to record a 1.8% increase last year; the figures are inching higher against 20166’s core CPI increase which was at 1.7%. Furthermore, the increase was still below what most analysts predicted which was at 2%; last year’s prediction also involves a massive 0.2%% month-on-month CPI increase.
The weaker-than-expected import and producer report price this week managed to apprehend further speculations; the negative figures hit the further inflation outlook. Moreover, despite having little correlation with the CPI, the lackluster prices still stir with the overall inflation outlook.
Most analysts are speculating and hoping that the tightening labor market coupled with the growing commodity prices and the lackluster dollar will eventually lift the current inflation and will surely tickle the fancy of the Federal Reserve. The current interest rate hike target and expectation are set to a whopping 2% for this year.
According to reports, the United States central bank is looking to have three more interests rate hike this year as it increased the total borrowing costs by three times last year.
Some more supporting data economic data are as follows; the U.S. households manage to buy more and new motor vehicles last year, a total of 0.6% increase in price last month and the biggest gain since early 2017. Furthermore, the motor vehicle insurance also managed to increase by 0.6%. The cheaper gasoline prices also managed to pull the CPI up.
On the other hand, the apparel for 2017 managed to dip by a total of 0.5%; while the food prices from last year managed to increase by 0.2% after having a steady performance from the past two months.
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