The Consumer Price Index rose 0.5 percent in January and that is on top of an upward revision in December from -0.1 percent to +0.1 percent.

CPI Data from BLS, chart by Mish

Judging from the jump in the Consumer Price Index, the Fed is not going to stop hiking rates soon. 

Key Details Month-Over-Month

• The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.5 percent in January on a seasonally adjusted basis, after increasing a revised 0.1 percent in December.
• The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase. Shelter rose 0.7 percent for the month.
• The food index increased 0.5 percent over the month with the food at home index rising 0.4 percent. 
• The energy index increased 2.0 percent over the month as all major energy component indexes rose over the month.
• The index for all items less food and energy rose 0.4 percent in January. 
• Categories which increased in January include the shelter, motor vehicle insurance, recreation, apparel, and household furnishings and operations indexes.
• The indexes for used cars and trucks, medical care, and airline fares were among those that decreased over the month.

CPI Year-Over-Year

CPI Year-Over-Year Details

• The all items index increased 6.4 percent for the 12 months ending January. This was the smallest 12-month increase since the period ending October 2021.
• The all items less food and energy index rose 5.6 percent over the last 12 months, its smallest 12-month increase since December 2021. 
• The energy index increased 8.7 percent for the 12 months ending January
• The food index increased 10.1 percent over the last year. 
• The shelter index increased 7.9 percent from a year ago.

CPI Month-Over-Month Shelter 

National Rent Prices

Based on falling national rent prices, many have been expecting the cost of shelter to start falling but I was not one of them. 

As noted for several months, national rent prices are in decline, but the reports are very misleading.

National rent price data from ApartmentList, OER and CPI data from the BLS, chart by Mish

Today that red question mark in the above chart was answered with another 0.7 percent jump.

National Rent Prices for New Leases Drop for the 5th Month

Three months ago I commented "I suspect we have strong increases in rent in the CPI despite the declines of ApartmentList for at least the rest of the year, and if so continuing into 2023."

ApartmentList reflects new leases not renewals of existing leases. Moreover, the BLS smooths things out. 

The year-over-year shelter index rose again this month, up 7.9 percent from a year ago.

I expect the pace of rent hikes to cool sometime this year, but strong declines like we have seen with the National Rent lists seem unlikely.

BLS Revisions  

BLS CPI Revisions vs Original Reporting, Chart by Mish

Yesterday I noted Huge CPI Revisions - Prices Rose Much Faster Than Originally Reported, for Months

On Friday, February 10, the BLS revised the CPI higher for four of the past five months, with one month unchanged. 

CPI Looking Ahead

In last months' CPI report, posted on January 12,  I commented "All things considered, I suspect this report is as good as it gets for a while." 

Revisions show that to have been an accurate assessment. The -0.1 percent deflation morphed into a revised 0.1 percent rise with another 0.5 percent jump this month.

How Long Will High Inflation Persist? What Happened to the Great Moderation?

For a longer-term outlook, please see my report How Long Will High Inflation Persist? What Happened to the Great Moderation?

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