Analysis: Stable Labor Market May Keep Fed on Hold

BlockBeats News, February 13th. The US Bureau of Labor Statistics announced on Friday that the Consumer Price Index (CPI) rose by 0.2% in January compared to the previous month, slightly lower than the 0.3% increase in December and below economists' expectations of 0.3%. Excluding the volatile food and energy prices, the core CPI rose by 0.3% month-on-month, slightly higher than the 0.2% increase in December.

As for year-over-year data, the CPI increased by 2.4%, slowing down from December's 2.7%, mainly due to the impact of a higher base year. The core CPI rose by 2.5% year-on-year, lower than December's 2.6%.

The January report for the first time included a seasonal adjustment factor update reflecting price changes in 2025. Economists pointed out that the core CPI data in January tends to exceed expectations every year because the Labor Department's model does not fully account for one-time price increase factors at the beginning of the year.

The increase this month may reflect both this early-year effect and the transmission effect of Trump's widespread tariffs. Despite the slowdown in inflation, the stabilization of the labor market may lead the Federal Reserve to maintain interest rates unchanged for a period. Economists expect that due to the transmission of import tariffs and the depreciation of the US dollar last year, inflation may rebound temporarily during the year. (Jin10)