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Published: Feb 16, 2023
Updated: Feb 16, 2023

US Inflation Remains High Despite Decrease for Seventh Consecutive Month

The latest US inflation data shows a decrease for the seventh consecutive month, but it still remains high. The market was volatile, but it closed flat with little gain in Nasdaq. Here's a breakdown of the latest inflation data and what it means for the US economy.

Housing and Rental Rates Driving Inflation Up

Shelter CPI rose 7.9% YoY, marking the highest rate of housing inflation since 1982. Rent accounts for 40% of core CPI and runs at around 9% annualized. Housing and rental rates were the main contributors to the high core inflation.

Core Inflation Remains Above Target

The core inflation, which excludes volatile items such as food and energy, was at 5.6%, higher than the expected 5.5%. Fed officials feel that inflation is still above the target of 2%, and the US central bank will need to keep raising interest rates.

US Inflation in Numbers

The January Consumer Price Index (CPI) stood at 6.4%, slightly higher than the estimated 6.2%. The core inflation, which excludes volatile items such as food and energy, was at 5.6%, also higher than the expected 5.5%.

Brent Crude Falls After US Announces Release of Oil Reserves

Brent crude fell almost 2% to around $85 per barrel after the US government announced plans to release 26 million barrels of oil from strategic reserves.

Rate hikes likely to continue

The US inflation data shows a decrease for the seventh consecutive month but still remains high. Housing and rental rates continue to drive core inflation up, and the US central bank will need to keep raising interest rates to combat inflation. The release of oil reserves by the US government caused a drop in Brent crude prices. The economy is still recovering from the pandemic, and controlling inflation will be a crucial factor in achieving stability.