The consumer price index (CPI) remained stable in January, while the year-on-year rate fell from 1.9% to 1.6% thanks to the sustained fall in the price of gasoline, which gives arguments to the Federal Reserve for his “patient” approach to the rate hike this year.
It is the third consecutive month in which prices remain unchanged.
Core inflation, which excludes energy and food prices due to its volatility, rose by 0.2% in January, and accumulated in the last twelve months stood at 2.2%.
The year-on-year level is the smallest in a year and a half, and shows how inflationary pressures have weakened in recent months.
The data published by the Department of Labor is slightly lower with analysts’ expectations, which forecast a 0.1% increase.
“Inflationary pressures have subsided in recent months due to the sharp decline in energy prices,” said the Cetera investment fund.
According to the report, gasoline fell by 5.5% in January, after registering a previous decline of 5.8% in December.
Faced with this, those of food increased by 0.2% and those of health also grew by 0.2%.
The slowdown in the rise in prices gives room for maneuver to the Federal Reserve (Fed) in its plan for moderation in the rise in interest rates, after its president, Jerome Powell, said that the central bank can take a while before his next rise in the price of money.
“The main concern is the global slowdown,” Powell said at a conference in Washington, citing the cases of the euro zone and China, while stressing the strength of the national economy.
The US economy shows an enviable health according to macroeconomic data, with an annual growth estimated in 2018 of close to 3% and an unemployment rate of 4%, at levels considered full employment.
The central bank has a dual mandate of price stability and promotion of full employment.
“The implications in monetary policy are obvious: the Fed is paused for now,” the consulting firm Moody’s Analytics said in a note to its clients.
The Fed kept interest rates at between 2.25% and 2.5% at its first meeting in 2019, and analysts anticipate that there will be no movement at least until the second half of the year.
“In the light of global economic and financial events and contained inflationary pressures, the committee will be patient as it determines future adjustments in the range of interest rates that may be appropriate,” the Fed statement said at the end of the week. of their two-day meeting in January.
The next meeting of the central bank on monetary policy is scheduled for March 19 and 20.
The financial markets welcomed the new inflation figure.
After meeting, and added to the good expectations of a trade agreement with China, Wall Street opened this Wednesday with gains and the Industrial Dow Jones, its main indicator, rose 0.60%, in a second consecutive day of investor optimism.
At the end of the month the first calculation of the evolution of the gross domestic product (GDP) of the country in 2018 will be known, which had to be delayed by the partial closure of the Federal Administration during five weeks at the beginning of the year. (EFEUSA) .-