💸 CPI – January

MacroDrip

The inflation print for January just hit the tape, so let’s dive right in!

Here are the headline prints:

Year-over-Year:

✅ *US JANUARY CPI RISES 2.4% Y/Y; EST. +2.5%
✅ *US JANUARY CORE CPI RISES 2.5% Y/Y; EST. +2.5%

Month-over-Month:

✅ *US JANUARY CPI RISES 0.2% M/M; EST. +0.3%
✅ *US JANUARY CORE CPI RISES 0.3% M/M; EST. +0.3%

For a complete breakdown of last month’s CPI,
download our US Inflation Dashboard.

January CPI — Year-over-Year

Let’s start with our chart that shows the weight of the three main CPI categories and their respective sub-groups on the left. On the right, you can see how each item contributes to the overall index.
(see December CPI)

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Next up, we’ve got two charts breaking down Core CPI — one showing year-over-year (YoY) changes and the other highlighting month-over-month (MoM) shifts, focusing on items with the most disproportionate impact.

January Core CPI — Year-over-Year

(see December Core CPI YoY)

January Core CPI — Month-over-Month

(see December Core CPI MoM)

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Overall, a soft inflation print for January.

Core CPI was up 0.3% on the month, with some outsized drivers like Motor Vehicle Fees, and especially Airline Fares.

Notably, some items saw significant declines this time, particularly Used Cars.

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On a year-over-year basis, Core CPI continues to be driven by the usual major contributors, mainly Shelter and Hospital Services.

Meanwhile, most of the excess YoY inflation still stems from Shelter. And as we’ve discussed many times before, official Shelter data significantly lags behind real-time private market indicators.

Basically, today’s numbers still include rent hikes from 15 months ago. But since real-time housing data is still below the Fed’s 2% target (per WisdomTree), we want to strip that out and here’s what we get:

January CPI less Shelter is up 2.0% YoY vs 2.4% for CPI.

January Core CPI less Shelter is up 2.1% YoY vs 2.5% for Core CPI.

Whenever people ask why we see Shelter inflation further deflating, we like to show them this chart.