From NBCUniversal:

In January 2024, the consumer price index in the U.S. rose 3.1% relative to the previous year, reflecting a deceleration in inflation compared to the 3.4% increase from December. Despite a downward trend, inflation in categories like shelter, food, electricity, and airline fares rose from December to January.

While inflation levels are moderating, some categories continue to show relatively high inflation, such as motor vehicle insurance, recreation, personal care, and medical care. Stubbornly high inflation in shelter, the largest component of the average household’s budget, continues to prop up overall inflation readings.

Consumers’ buying power has seen a significant increase as inflation has fallen in recent times. Workers’ hourly pay has exceeded the rate of inflation since May 2023, and real average hourly earnings rose by 1.4% between January 2023 and January 2024. In January, consumer sentiment jumped by 13%, reflecting improvements in the outlook for both inflation and personal incomes.

The inflation surge in the early months of 2021 is attributed to consumer demand for household goods increasing as people spent more time at home during the pandemic. Businesses faced challenges in keeping up with high demand due to supply chain issues, causing prices to skyrocket. Business’ demand for workers and the high costs of labor further impacted inflation.

Certain high-inflation categories show signs of improvement, such as a decline in the cost of groceries from a peak around 13.5% in August 2022 to just 1.2% over the past 12 months. Meanwhile, overall energy costs have decreased, with gasoline down 6.4%, natural gas 17.8%, and fuel oil 14.2%. Other categories that have retreated significantly include frozen noncarbonated juices and drinks, and beef, which also remain elevated.



Read more: Here’s the inflation breakdown for January 2024 — in one chart