US CPI slows to 3.1% in January after ticking up in December

WASHINGTON -- US consumer inflation in January slowed to 3.1 percent from a year ago, after ticking up to 3.4 percent in December, the US Labor Department reported Tuesday.

The Consumer Price Index (CPI) increased 0.3 percent in January on a seasonally adjusted basis, after rising 0.2 percent in December, according to the department's Bureau of Labor Statistics.

The index for shelter continued to rise in January, increasing 0.6 percent and contributing over two-thirds of the monthly all items increase.

The food index increased 0.4 percent in January. In contrast, the energy index fell 0.9 percent over the month due in large part to the decline in the gasoline index.

The latest inflation report showed that the so-called core CPI, which excludes food and energy, increased 0.4 percent in January, after edging up 0.3 percent in December. Core CPI rose 3.9 percent over the last 12 months, the same increase as for the 12 months ending December.

The energy index decreased 4.6 percent for the 12 months ending January, while the food index increased 2.6 percent over the last year.

At its Jan 30-31 policy meeting, the US Federal Reserve left interest rates unchanged at a 22-year high of 5.25 percent to 5.5 percent as inflation continued to cool, while avoiding the signal of an imminent rate cut going forward.

At a press conference, Fed Chair Jerome Powell said that inflation had eased from its highs without a significant increase in unemployment, which was "very good news," while noting that inflation remained above the Fed's longer-run goal of 2 percent.

"Inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain," he said.

"We are certainly encouraged by the progress, but we are not declaring victory at all at this point. We think we have a ways to go," he said.