US inflation slows less than expected in January, headline 3.1% and core 3.9%

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Bankinter: Inflation slowed less than expected in January, while core inflation also missed expectations. CPI was +3.1% year-on-year against +2.9% expected and +3.4% previously. Underlying was +3.9% versus +3.7% expected and +3.9% previously.

Assessment: Negative data for stock markets and bonds, as the general rate returns to the deceleration trend, but less than expected. On the core side, the reading repeats December’s figure, when a marginal decline was expected. This data works against a Fed that, since its meeting on 31 January, has been reinforcing the need to gain confidence in the good evolution of inflation. With the economy holding up better than expected, supported by a strong labour market, the Fed has no incentive to cut rates in the short term.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.