CPI Report – Spike in Inflation Pressures Investors

The Bureau of Labor Statistics has released the consumer-price index for January. The index, commonly referred to as CPI, calculates the average price of consumer goods such as foods and equipment. The CPI represents overall inflation – or deflation – in prices. This is the first CPI since the stock market correction, and the first 10-year treasury notes hit a 4 year high. Investors look closely at this data, and a worse than expected CPI could send markets downwards.

Analysts expected a 1.9 percent increase in total, with a 1.7 percent core increase. The Bureau of Labor Statistics announced a 2.1 percent total increase and a 1.8 percent core increase, meaning that prices increased at a higher rate than expected. Investors think this make the Fed increase interest rates at least 3 times in 2018. This caused a negative open in the Dow Jones, which quickly recovered. 10-year treasury notes gained 3.5 basis points, rising to 2.88 percent.

Michael Pearce, a prominent economist, said, “The increase in core CPI inflation in January is a sign of things to come over the rest of the year.”

Important numbers in the CPI include:

  • Fuel oil gained 9.5%
  • Gasoline gained 5.7%
  • Food prices rose 0.2%
  • Clothing costs increased by 1.7%

Read the full report here.

About Holden

Holden is the creator of holdencasey.com. He is the lead editor and consistently writes about politics and finance. He often writes unbiasedly, but occasionally provides a liberal viewpoint in his work.
View all posts by Holden →

1 thought on “CPI Report – Spike in Inflation Pressures Investors

Leave a Reply

Your email address will not be published. Required fields are marked *