United States Inflation January 2018

United States

United States: Inflation holds steady in January, while month-on-month price pressures strengthen

February 14, 2018

Consumer prices increased 0.5% from the previous month in January, following December’s upwardly revised 0.2% rise (previously reported: +0.1% month-on-month), coming in above analysts’ expectations of a 0.3% increase. A surge in energy prices contributed to January’s reading, with prices of gasoline and fuel oil jumping 5.7% and 9.5% on a month-on-month basis, respectively. Meanwhile, food prices rose 0.2% for the second consecutive month. Despite January’s pick-up, inflation remained stable from December at 2.1%.

Core consumer prices, which exclude volatile items including food and energy prices, rose 0.3% from the previous month in January, slightly above the 0.2% increase that markets had expected and the downwardly revised 0.2% month-on-month rise recorded in December (previously reported: +0.3% month-on-month). The print was largely driven by strong price increases for medical care, transportation and apparel. Notably, core inflation was unchanged at December’s 1.8% in January, below the Federal Reserve’s 2.0% target.

It is worth noting that prices rose in January in nearly all components that comprise the consumer price index (CPI), which analysts view as a strong sign that inflationary pressures are taking hold. January’s CPI results, coupled with the upbeat wage growth data released earlier this month, will fuel expectations of a rate hike at the upcoming FOMC meeting in March, as largely expected by FocusEconomics panelists.

United States Inflation Forecast


FocusEconomics Consensus Forecast participants expect inflation to average 2.2% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, the panel also expects inflation to average 2.2%.


Author:, Economist

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United States Inflation Chart


USA Inflation January 2018

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Bureau of Labor Statistics.


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