Inflation is heating up again, little surprise to consumers feeling the sting of price hikes in everyday purchases.
The Consumer Price Index surged 3% over the prior year in January and an uptick from December’s 2.9% increase. The month-over-month increase was 0.5% — the largest monthly jump since August 2023.
Categories like food, fuel, and insurance remain elevated, which one economist termed “a familiar disappointment.” Here’s what the latest CPI report means for your household:
Food creeps back up
Groceries increased 0.3% in December, after rising 0.5% in November. But even with that slowdown, major food groups are showing price hikes.
The big (old) story: eggs, which jumped 15.2% monthly and are up an eye-popping 53% from a year ago. A dozen large Grade A eggs, on average, cost $4.95 in January, compared to $4.15 in December and far higher than the $2.52 at the start of 2024.
Other breakfast staples like coffee and orange juice also saw notable increases. Grocery prices rose 0.5% over the month and were up almost 2% from a year ago. A couple of items saw slower price growth: fruits and vegetables were down 0.5%, and cereals and bakery products slowed 0.4%.
The cost of eating out held steady from December to January, up just 0.2%, but was still 3.4% higher than a year ago.
Health insurance, senior care, and other health costs keep rising
Health insurance rose 4% compared to January 2023 and was up 0.7% monthly. The index for prescription drugs jumped 2.5% month over month and was 4.5% higher than a year ago.
Home healthcare was 8% higher than a year ago, while nursing home care was up 3.5%. Hospital and related services crept up 3.2%, the BLS found.
The cost of driving
Price growth for used cars had slowed since last year, but in January surged 2.2%. New vehicle prices were flat. Auto insurance, which has been soaring for more than a year, grew 2% month over month and is nearly 12% higher than a year ago.
Three consecutive years of underwriting losses mean insurers have paid out more in claims and expenses than they took in through the premiums we pay — leading to the steep hikes felt today.
There was better news at the gas pump. The gasoline index rose 1.8% in January, a relief from December’s 4.4% rise. As of Feb. 12, the national average for gasoline was $3.15 per gallon, according to AAA data.
What’s next
Inflation remains above the Federal Reserve’s target of 2%. That, combined with January’s hotter-than-expected reading, is likely to keep the Fed on pause from cutting interest rates during its policy meeting next month — and even for much of this year.
