US inflation rose 3.1% in January, a hotter-than-expected increase that further stokes doubts as to whether the Federal Reserve will begin cutting interest rates this spring.
Last month’s Consumer Price Index — which tracks changes in the costs of everyday goods and services — came in higher than the 2.9% figure economists had expected, according to FacfSet.
Core CPI — a number that excludes volatile food and energy prices — increased 0.4% in January, to 3.9%, after rising 0.3% in December. The figure, a closely-watched gauge among policymakers for long-term trends, was also higher than what economists at FactSet expected.
Dow futures were poised to drop early Tuesday as traders began to unwind bets that the Fed will begin easing rates sooner rather than later.
The latest inflation figure marks a cooldown from December’s stiffer-than-expected 3.4% gain, which dampened hopes on Wall Street that the first of three highly-anticipated interest rate cuts this year could come as soon as March.
“The question is whether or not May 1 remains a possibility if the next series of inflation related data do not edge lower than expected,” said LPL Financial’s chief global strategist, Quincy Krosby.
“This could easily be a one off. But for all those people saying rates are too high, he’s got to cut now,” Chris Zaccarelli, chief investment officer of Independent Advisor Alliance, said of Fed Chair Jerome Powell. “What are we waiting for? This is why. This is exactly what Powell was worried about.”
The Bureau of Labor Statistics attributed the CPI’s increase to the shelter index, which rose 0.6% on a monthly basis and contributed to two-thirds of the monthly all-items increase. The food index increased 0.4% in January, more than the 0.2% it advanced in December.
The gas index, meanwhile, experienced a handsome 3.3% drop, offsetting increases in the electricity and natural gas indexes, the federal agency said. As of Tuesday, the average price for a gallon of gas in the US is $3.23, according to AAA data.
The Bureau of Labor Statistics’ latest CPI report underscores that cash-strapped Americans, who are still dealing with retail prices far above where they were before the pandemic.
Hopes for rate cuts also took a hit with the January jobs report showing the labor market is booming, with US employers adding a staggering 353,000 jobs last month.
The figure blew past the 185,000 jobs economists expected, as the unemployment rate remained steady at 3.7% for the third month in a row.
Januarys jobs report was the first major piece of economic data since the Federal Reserves latest policy meeting, when central bankersunanimously decided to keep interest rates at their current 22-year high, between 5.25% and 5.5%.
Considering the jobs report and the CPI, the Fed still “doesnt have a coherent set of criteria for cutting, so for all we know this resets the clock,” according to Subadra Rajappa, Societe Generale’s Head of US Rates Strategy.
“If cutting is a confidence game, we dont know when enough progress is enough or whether mild setbacks undermine their confidence.”
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Meanwhile, President Joe Biden has addressed the issue of “shrinkflation” — when businesses cut product sizes but keep prices the same — in a video posted on X ahead of Super Bowl LVIII.
Biden called the practice “a rip-off.”
Im calling on companies to put a stop to this. Lets make sure businesses do the right thing now, he said, though he didn’t offer a solution or policy to address the practice.
Senator Bob Casey in December released a report that showed the impact of smaller product sizes on everything from toilet paper to Oreos.
The report noted that household paper products were 34.9% more expensive per unit than they were in January 2019, with about 10.3% of the increase due to producers shrinking the sizes of rolls and packages.
It said the price of snacks like Oreos and Doritos had gone up 26.4% over the same period, with shrinking portions accounting for 9.8% percent of the increase.
Although inflation appears to be slowing, the economy remains Americans overall top concern, cited by 22% of poll respondents, as they have struggled with inflation and other aftershocks of the COVID-19 pandemic, according to a Reuters/Ipsos poll released last month.
Since taking office, Biden has made a pitch for lower supermarket prices, pushed drug makers to lower insulin costs, hotel chains to reduce fees and tried to diversify the meat-packing industry after beef prices skyrocketed in the aftermath of the pandemic.
WINNIPEG, Manitoba — Kyle Connor‘s one-timer with 1:36 remaining in the third period snapped a 3-3 tie, and the No. 1 seed Winnipeg Jets survived a Game 1 scare — and some shaky goaltending from Connor Hellebuyck — to post a 5-3 victory over the St. Louis Blues in the opener of the Stanley Cup playoffs.
Connor also contributed a pair of assists and captain Adam Lowry capped the victory with an empty-netter with 53 seconds left, much to the delight of the “whiteout” full house of 15,225 fans at the Canada Life Centre.
“There were some emotional swings. Obviously, we didn’t get off to the start we wanted,” Lowry said during his postgame bench interview, aired on the arena’s jumbotron. “But what an incredible third period, what an incredible atmosphere. And we’re real happy with the result.”
Game 2 in the best-of-seven series is Monday in Winnipeg, and the home team knows it will need a more complete effort in their own zone if it is to gain a 2-0 series lead. Hellebuyck made 14 saves en route to the win, but in allowing three goals in the first two periods, he finished with a concerning .824 save percentage.
But Mark Scheifele had a goal and two assists and Jaret Anderson-Dolan also scored for the Jets, who won the Presidents’ Trophy for the NHL’s best regular-season record (56-22-4). With his three points, Scheifele became the Jets’ all-time leader in playoff points with 41.
“It’s obviously really cool,” Scheifele said of the record. “To do it in front of the fans tonight was pretty special. That was a fun game to be a part of.”
Jordan Kyrou gave the Blues a 3-2 lead with a power-play goal early in the second period, but Winnipeg’s top-line winger Alex Iafallo tied it at 9:18 of the third.
Jordan Binnington stopped 21 shots for St. Louis, which grabbed the Western Conference’s final wild-card spot with a final-game victory.
St. Louis outshot the Jets 9-7 in the opening period, and dished out 32 hits to Winnipeg’s 14, as the teams hit the locker room tied at 2-2.
The Blues came out of the first intermission and used the power play for Kyrou’s goal at 1:13 and a 3-2 lead. It extended his season-ending point streak to four goals and two assists in four games.
“Overall, I thought it was a really good hockey game, but we are going to grow and we are going to get better,” Blues coach Jim Montgomery said. “That’s what we’re going to have to do. … We’ve got a lot of young guys playing in their first game in the Stanley Cup playoffs. That’s why I know we will get better.”
Winnipeg couldn’t capitalize on its early third-period man advantage but came close when Binnington denied Connor on a one-timer.
After Lowry’s goal, players paired up for some fighting with 19 seconds left after a regular-season series that Winnipeg won 3-1.
“That’s playoff hockey,” Hellebuyck said. “You have to play ’till the last minute, the last second. You know, it was a lot of fun, the guys were buzzing out there. I didn’t get a whole lot of action in the third. But it was really fun to watch and be a part of it.”
Brandon Lowe tied the score with a two-run single in a four-run ninth inning off Williams, Jonathan Aranda hit a two-run homer in the 10th against Yoendrys Gomez, and the Tampa Bay Rays beat the Yankees 10-8 on Saturday to stop New York’s five-game winning streak.
“Yeah, four-run lead, you’d like to get in and get out,” Williams said. “Made some good pitches; made some bad ones. Not enough good ones today.”
Williams has a 9.00 ERA and has allowed runs in four of nine appearances. While he has four saves in four chances, Williams has walked seven in eight innings, and opponents have a .333 average against him.
“We got a long way to go,” Yankees manager Aaron Boone said of Williams. “It’s a little bump here early, and he’s got all the equipment to get through it.”
Luke Weaver, who struck out two in a perfect eighth, could become an increasingly enticing option to replace Williams as closer. After thriving when he took over the closer role from Clay Holmes late last season, Weaver has not allowed a run in 11 innings over nine games this year and has given up just two hits while striking out 13 and walking five.
Acquired in December from Milwaukee for left-hander Nestor Cortes and infield prospect Caleb Durbin, Williams can become a free agent after the season.
Williams converted 14 of 15 save chances with a 1.25 ERA for the Brewers last year, striking out 38 and walking 11 in 21⅔ innings. Diagnosed during 2024 spring training with two stress fractures in his back, he didn’t make his season debut until July 28.
Given an 8-4 lead, Williams allowed Jose Caballero‘s one-out single on a chopper as third baseman Oswaldo Cabrera made a high throw, for an error, then walked No. 9 batter Ben Rortvedt. Chandler Simpson hit an opposite-field RBI double to left for his first big league hit, Yandy Diaz hit a run-scoring infield single and Lowe singled to left.
“A lot of soft contact,” Boone said.
Williams allowed the hits to Caballero, Diaz and Lowe on his changeup, known as an airbender.
“Just the changeup to Lowe. I’d like to have that one back,” Williams said. “Tough luck on that double down the line, but aside from that, I thought I threw the ball pretty well.”
Williams generated just one swing-and-miss among his seven changeups.
“Maybe using it too much,” he said. “We’ll work on that.”
Unwary travellers returning from the EU risk having their sandwiches and local delicacies, such as cheese, confiscated as they enter the UK.
The luggage in which they are carrying their goodies may also be seized and destroyed – and if Border Force catch them trying to smuggle meat or dairy products without a declaration, they could face criminal charges.
This may or may not be bureaucratic over-reaction.
It’s certainly just another of the barriers EU and UK authorities are busily throwing up between each other and their citizens – at a time when political leaders keep saying the two sides should be drawing together in the face of Donald Trump’s attacks on European trade and security.
Image: Keir Starmer’s been embarking on a reset with European leaders. Pic: Reuters
The ban on bringing back “cattle, sheep, goat, and pig meat, as well as dairy products, from EU countries into Great Britain for personal use” is meant “to protect the health of British livestock, the security of farmers, and the UK’s food security.”
There are bitter memories of previous outbreaks of foot and mouth disease in this country, in 1967 and 2001.
In 2001, there were more than 2,000 confirmed cases of infection resulting in six million sheep and cattle being destroyed. Footpaths were closed across the nation and the general election had to be delayed.
In the EU this year, there have been five cases confirmed in Slovakia and four in Hungary. There was a single outbreak in Germany in January, though Defra, the UK agriculture department, says that’s “no longer significant”.
Image: Authorities carry disinfectant near a farm in Dunakiliti, Hungary. Pic: Reuters
Better safe than sorry?
None of the cases of infection are in the three most popular countries for UK visitors – Spain, France, and Italy – now joining the ban. Places from which travellers are most likely to bring back a bit of cheese, salami, or chorizo.
Could the government be putting on a show to farmers that it’s on their side at the price of the public’s inconvenience, when its own measures on inheritance tax and failure to match lost EU subsidies are really doing the farming community harm?
Many will say it’s better to be safe than sorry, but the question remains whether the ban is proportionate or even well targeted on likely sources of infection.
Image: No more gourmet chorizo brought back from Spain for you. File pic: iStock
A ‘Brexit benefit’? Don’t be fooled
The EU has already introduced emergency measures to contain the disease where it has been found. Several thousand cattle in Hungary and Slovenia have been vaccinated or destroyed.
The UK’s ability to impose the ban is not “a benefit of Brexit”. Member nations including the UK were perfectly able to ban the movement of animals and animal products during the “mad cow disease” outbreak in the 1990s, much to the annoyance of the British government of the day.
Since leaving the EU, England, Scotland and Wales are no longer under EU veterinary regulation.
Northern Ireland still is because of its open border with the Republic. The latest ban does not cover people coming into Northern Ireland, Jersey, Guernsey, or the Isle of Man.
Rather than introducing further red tape of its own, the British government is supposed to be seeking closer “alignment” with the EU on animal and vegetable trade – SPS or “sanitary and phytosanitary” measures, in the jargon.
Image: A ban on cheese? That’s anything but cracking. Pic: iStock
UK can’t shake ties to EU
The reasons for this are obvious and potentially make or break for food producers in this country.
The EU is the recipient of 67% of UK agri-food exports, even though this has declined by more than 5% since Brexit.
The introduction of full, cumbersome, SPS checks has been delayed five times but are due to come in this October. The government estimates the cost to the industry will be £330m, food producers say it will be more like £2bn.
With Brexit, the UK became a “third country” to the EU, just like the US or China or any other nation. The UK’s ties to the European bloc, however, are much greater.
Half of the UK’s imports come from the EU and 41% of its exports go there. The US is the UK’s single largest national trading partner, but still only accounts for around 17% of trade, in or out.
The difference in the statistics for travellers are even starker – 77% of trips abroad from the UK, for business, leisure or personal reasons, are to EU countries. That is 66.7 million visits a year, compared to 4.5 million or 5% to the US.
And that was in 2023, before Donald Trump and JD Vance’s hostile words and actions put foreign visitors off.
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Trump: ‘Europe is free-loading’
More bureaucratic botheration
Meanwhile, the UK and the EU are making travel between them more bothersome for their citizens and businesses.
This October, the EU’s much-delayed EES or Entry Exit System is due to come into force. Every foreigner will be required to provide biometric information – including fingerprints and scans – every time they enter or leave the Schengen area.
From October next year, visitors from countries including the UK will have to be authorised in advance by ETIAS, the European Travel and Authorisation System. Applications will cost seven euros and will be valid for three years.
Since the beginning of this month, European visitors to the UK have been subject to similar reciprocal measures. They must apply for an ETA, an Electronic Travel Authorisation. This lasts for two years or until a passport expires and costs £16.
The days of freedom of movement for people, goods, and services between the UK and its neighbours are long gone.
The British economy has lost out and British citizens and businesses suffer from greater bureaucratic botheration.
Nor has immigration into the UK gone down since leaving the EU. The numbers have actually gone up, with people from Commonwealth countries, including India, Pakistan and Nigeria, more than compensating for EU citizens who used to come and go.
Image: Editor’s note: Hands off my focaccia sandwiches with prosciutto! Pic: iStock
Will European reset pay off?
The government is talking loudly about the possible benefits of a trade “deal” with Trump’s America.
Meanwhile, minister Nick Thomas Symonds and the civil servant Mike Ellam are engaged in low-profile negotiations with Europe – which could be of far greater economic and social significance.
The public will have to wait to see what progress is being made at least until the first-ever EU-UK summit, due to take place on 19 May this year.
Hard-pressed British food producers and travellers – not to mention young people shut out of educational opportunities in Europe – can only hope that Sir Keir Starmer considers their interests as positively as he does sucking up to the Trump administration.