The cost of groceries, gasoline and rent is continuing to skyrocket as inflation remains on the rise. The latest report from the Labor Department shows that January’s consumer price index increased 3% from a year ago. That’s also a 2.9% increase from the previous month, according to PBS News.
Although inflation appeared to be on the decline for about 18 months, the latest data shows that it has remained above the Fed’s 2% target for the past six months. While President Donald Trump vowed to reduce prices on the first day of his term, most economists says his proposed tariffs will likely increase costs at least temporarily.
“We’re really not making progress on inflation right now,” Sarah House, senior economist at Wells Fargo, told PBS. “This just extends the Fed’s hold.”
Although inflation normally rises at the beginning of the year, the government usually makes adjustments to minimize the effects. The latest figures show that inflation has continued to worsen in recent months, increasing 0.5% from December to January. As grocery prices rose by 0.5% in January, mainly due to a 15.2% increase in egg prices, that surge became the highest monthly jump since June 2015.
As inflation remains high, the Dow fell 400 points on Wednesday. Meanwhile, consumers are seeing rising costs in car insurance, hotel prices and gas. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said the latest figures are “sobering” in an interview with The New York Times.
“There’s no question, if we got multiple months like this, then the job is clearly not done,” he said.
