US inflation charges higher with larger-than-forecast gain

[WASHINGTON, DC] US consumer prices jumped in January by more than expected, representing a bigger hit to Americans' pay cheques as inflation charges ahead at the fastest pace since 1982 and the Federal Reserve prepares to raise interest rates.

The consumer price index (CPI) climbed 7.5 per cent from a year earlier following a 7 per cent annual gain in December, according to Labor Department data released on Thursday (Feb 10). The widely followed inflation gauge rose 0.6 per cent in January from a month earlier.

Excluding the volatile food and energy components, so-called core prices increased 6 per cent from a year ago, also the most since 1982, and 0.6 per cent from a month earlier.

Economists projected a 7.3 per cent year-over-year increase in the CPI and 0.4 per cent gain from a month earlier, according to the Bloomberg survey medians. BLOOMBERG