U.S. inflation barely budges to 6.4% as food, gas and shelter get more expensive

The annual U.S. inflation rate was almost unchanged in January as the cost of food, shelter and gasoline rose more during the month.

The US Bureau of Labor Statistics reported Tuesday that the Consumer Price Index came in at 6.4 percent in the 12 months to the end of January. That was down slightly from the previous month’s 6.5 percent rate but higher than the 6.2 percent economists had expected.

The cost of living rose 0.5 percent in January, with shelter costs rising 0.7 percent. In the past year, shelter costs have increased by 7.9 percent.

Food and gasoline costs were also more expensive in January than in previous months.

The biggest contributor to the slight slowdown in the overall rate was the decline in used car and truck prices, which rose higher than last year.

Used vehicle prices fell 1.9 percent in January, and are down 11.9 percent over the past 12 months.

Inflation is high everywhere

After plunging at the start of the pandemic, inflation rates have been rising worldwide since the end of 2021 for various reasons. The rate peaked in the US in June 2022 at 9.1 percent and is falling slowly, but not as quickly as consumers and policymakers would like.

The US central bank, the Federal Reserve, has raised interest rates aggressively in recent months to try to dampen demand. So far all that has been achieved is to take the rate from more than three times higher than the upper limit of three percent of the target to more than twice.

Royce Mendes, an economist with financial services conglomerate Desjardins, said the details of the report showed that the fight against inflation still has a long way to go.

“The latest consumer price data shows that the Fed has not shot inflation too high,” he said.