U.S. inflation likely slowed again last month in the latest sign that consumer price increases are becoming less of a burden on America’s households. But Tuesday’s report from the government may also suggest that further progress in taming inflation could be slow and “bumpy,” as Federal Reserve Chair Jerome Powell has described it.
Consumer prices are expected to have risen 6.2% in January from 12 months earlier, down from a 6.5% year-over-year surge in December. It would amount to the seventh straight slowdown.
On a monthly basis, though, inflation is expected to have jumped 0.5% from December to January, according to a survey of economists by the data provider FactSet. That would be much faster than the 0.1% uptick from November to December.
So-called core prices, which exclude volatile food and energy costs to provide a clearer view of underlying inflation, are also expected to have slowed on a 12-month basis. They are forecast to have increased 5.5% in January from a year earlier, down from a 5.7% year-over-year rise in December.
But for January alone, economists estimate that core prices jumped 0.4% for a second straight month — roughly equivalent to a 5% annual pace, far above the Fed’s target of 2%.
“The process of getting inflation down has begun,” Powell said in remarks last week. But “this process is likely to take quite a bit of time. It’s not going to be, we don’t think, smooth, it’s probably going to be bumpy.”
Average gasoline prices, which had declined in five of the past six months through December, likely rose about 3.5% in January, according to an estimate from Nationwide. Food prices are also expected to have risen, though more slowly than the huge spikes of last summer and fall.
On a brighter note, clothing and airfare costs are thought to have barely budged from December to January. And economists have estimated that hotel room prices fell sharply.