U.S. inflation barely budges to 6.4% as food, gas and shelter get more expensive

The U.S. annual inflation rate barely changed in January as the cost of things like food, shelter and gasoline got more expensive during the month.

The U.S. Bureau of Labour Statistics reported Tuesday that the Consumer Price Index came in at 6.4 per cent for the 12 months up until the end of January. That's slightly down from the previous month's 6.5 per cent level but higher than the 6.2 per cent that economists were expecting.

The cost of living increased by 0.5 per cent in the month of January, with shelter costs increasing by 0.7 per cent. In the past year, shelter costs are up by 7.9 per cent.

The cost of food and gasoline was also more expensive in January than it was the previous month.

The biggest contributor to the slight slowdown in the overall rate was a drop in the price of used cars and trucks, which were skyrocketing higher this time last year.

Used vehicle prices fell by 1.9 per cent in January, and are down by 11.9 per cent in the past 12 months.

High inflation everywhere

After plunging in the early days of the pandemic, inflation rates have soared around the world starting in late 2021 for a variety of reasons. The rate peaked in the U.S. in June of 2022 at 9.1 per cent and has slowly and steadily come down, but not as fast as consumers and policy makers would like to see.

The U.S. central bank, the Federal Reserve, has raised lending rates aggressively in recent months to try to slow down demand. So far all it has achieved is to take the rate from more than three times higher than the three per cent upper limit of its target to a little over twice as high.

Royce Mendes, an economist with financial services conglomerate Desjardins, says the details of the report show that the fight against inflation is far from over.

"The latest consumer price data show that the Fed has yet to shoot down high-flying inflation," he said.