Inflation Higher Than Expected in January

Inflation isn’t going anywhere fast and may well be picking up steam, according to January’s consumer price index released on Wednesday.

Prices rose by 0.5% in the month and 3% for the year. That compares to a 0.4% gain in December and a 2.9% annual rate. The core index, leaving out food and energy costs which can be volatile, increased 0.4% and is now running at 3.3%.

The stickiness of inflation and a generally strong economy and expanding labor market leaves the Federal Reserve in a position of holding interest rates steady. The central bank held rates steady at its January meeting and is expected to do so again when it meets in March.

“The food away from home index rose 0.2% in January, and 3.4% over the last year,” said Joe Hannon, general manager, inventory and purchasing, at Restaurant365. “Higher costs don’t just impact restaurant expenses—they also influence how people decide where and when to dine out.”