On Tuesday, ABC News Business Reporter Alexis Christoforous stated that the January inflation report is “sort of one step forward, two steps back.” And “we still have a long way to go, and this is because inflation has now been with us for a few solid years and it’s sort of embedded itself in certain areas” like rent and food.
Christoforous stated, “Inflation at 6.4%, the Fed wants to get it down to about 2%. So, we still have a ways to go. I’m going to call this a mixed inflation report. It’s sort of one step forward, two steps back. On a yearly basis, good news here, inflation up 6.4%, but a little bit better than where we were, up 6.5%. Also, month-over-month — this is more than expected — prices up 0.5%. And when we dug into this report, we found that gas prices were a big reason why. … Food prices still stubbornly high, up 0.5% month-over-month. And rent prices, Diane, this is where we’re really getting socked, rent prices up year-over-year nearly 8%, month-over-month more than 0.5%.”
She added that interest rate hikes by the Federal Reserve “are starting to seep through the economy and we’re starting to see [them] take hold in certain areas of the economy. But we still have a long way to go, and this is because inflation has now been with us for a few solid years and it’s sort of embedded itself in certain areas, so it becomes more stubborn for the Fed to be able to get in there. Remember, the job market remains very high. Wages have to be high, because businesses need to stay competitive to gain workers and that’s keeping pressure on inflation.”
Christoforous further said that while some of the increase in prices is an expected return from low prices during the pandemic and some things are normalizing, “there are some areas where inflation is just so embedded, despite the pandemic, we just can’t seem to get rid of it. And that includes things like rent and food.”
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