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United States Inflation

United States Inflation

Inflation in United States

The United States experienced low and stable inflation for most of 2013-2022, averaging around 2%. This period of stability, underpinned by effective monetary policy, was disrupted significantly by the COVID-19 pandemic. In 2021-2022, inflation rates surged to their highest in decades, driven by supply chain issues, stimulus spending, and increased consumer demand. This sudden spike posed challenges for monetary policy, highlighting the delicate balance between economic stimulus and inflation control in such unprecedented economic conditions.

Consumer price inflation in the United States averaged 2.5% in the ten years to 2022, above the major economies' regional average of 2.1%. The 2022 average figure was 8.0%. For more inflation information, visit our dedicated page.

United States Inflation Chart

Note: This chart displays Inflation Rate (CPI, annual variation in %) for United States from 2014 to 2023.
Source: U.S. Bureau of Labor Statistics.

United States Inflation Data

2018 2019 2020 2021 2022
Inflation (CPI, ann. var. %, aop) 2.4 1.8 1.2 4.7 8.0
Inflation (CPI, ann. var. %, eop) 1.9 2.3 1.4 7.0 6.5
Inflation (Core, ann. var. %, aop) 2.1 2.2 1.7 3.6 6.2
Inflation (PPI, ann. var. %, aop) 2.9 1.7 0.2 7.0 9.5

Inflation exceeds market expectations in January

Inflation came in at 3.1% in January, which was down from December’s 3.4%. January's figure represented the weakest inflation rate since June 2023, but was above market expectations of 2.9% and still notably higher than the Fed’s 2.0% target. Looking at the details of the release, housing, food and transport prices rose at more moderate paces in January. Accordingly, the trend pointed down, with annual average inflation coming in at 3.8% in January (December: 4.1%). Meanwhile, core inflation was steady, coming in at December's 3.9% in January and also higher than market expectations. Lastly, consumer prices rose 0.31% from the previous month in January, accelerating from the 0.23% increase seen in December. January's result marked the highest reading since September 2023.

Inflation should trend down later this year but is seen above the Fed’s target throughout 2024 on resilient economic activity.

On the monetary policy implications, Nomura analysts said: “Strong January inflation data will likely keep the Fed on hold until at least June. We now forecast three 25bp rate cuts this year, at the June, September, and December meetings. We had previously expected 100bp of easing this year, with the first cut in May. […] Strength in many services components is likely transitory, but the breadth of the acceleration is alarming and some components may presage more persistent upward pressure. […].” In contrast, Goldman Sachs analysts were somewhat more dovish: “The January CPI report was broadly similar to our expectations. […] we continue to expect inflation in non-housing services to normalize in February and March now that the start-of-year price increases have been implemented. We continue to expect the FOMC to leave the Fed funds rate unchanged at the March meeting and to begin the easing cycle in May.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects American inflation projections for the next ten years from a panel of 58 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for American inflation.

Download one of our sample reports to visualize what a Consensus Forecast is and see our American inflation projections.

Want to get access to the full dataset of American inflation forecasts? Send an email to info@focus-economics.com.

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