January CPI: Inflation climbs to 6.4% year-over-year, ticks up 0.5% month-over-month

Yahoo Finance Video
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Yahoo Finance Live break down increasing inflation data from January's CPI print and what consumer categories are impacted the most.

Video Transcript

DAVE BRIGGS: Let's get you up to speed on inflation. It picked up in the first month of the year. January's consumer price index showed a 0.5% increase in prices over the past month. Rising shelter and energy costs a big reason why. Year-over-year CPI rose 6.4%. Economists had expected prices to climb 6.2% over the year. Core CPI, which strips out the more volatile food and energy prices, increased 0.4% monthly and 5.6% from a year ago. Forecast called for a 5.5% annual increase.

Largely speaking, meh. Not an overwhelming reading in either direction. I've heard people make the case in either direction that this justifies that we are going to get to 2%, and it justifies that we are not. So it's kind of an economic Rorschach test.

SEANA SMITH: Yeah, certainly, and I think it's tough to really figure out that. Maybe that's why we're not seeing too much reaction in terms of the markets right now, no overreaction to this report, the fact that it was slightly hotter than expected. I think some of us maybe were anticipating that we would see declines across the board today.

But as we enter the final hour of trading, it's only the Dow moving to the downside. Some improvement that we saw in terms of improvement. Good news for consumers in airfare prices, also used-car prices. They declined, but certainly we were not-- not as big of a decline as many were anticipating or hoping to see on the Street.

DAVE BRIGGS: But what does it tell you is coming? Because to me, it's just--

SEANA SMITH: More rate hikes

DAVE BRIGGS: --more evidence that they're going to need to do more, that they're going to have to keep it tighter longer, and that they're not-- and I've said this a thousand times-- going to get anywhere near 2% in the near future, not this year. Be surprised if it's early or the middle of next year before we even get to 2 and 1/2% or 3%. That's just one man speaking. What do you see?

SEANA SMITH: Yeah, I don't know. I think it's a little optimistic if you think we're going to get, I think, below that 3% number by year end when it comes to inflation, but some out there are saying that maybe we could see that. So maybe they will prove us wrong.

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