Consumer Price Index report
- Claire Carpenter
- 2 days ago
- 2 min read
On February 13, 2025, the Bureau of Labor Statistics released the Consumer Price Index report. Known as the CPI, this report is the government’s main gauge of how inflation impacts the average American household. The Consumer Price Index analyzes the price of a “market basket” of goods, comparing it to an average over time. Indicating how much more or less consumers pay for groceries, healthcare, fuel, utilities, etc., the CPI is closely watched by policymakers looking to measure the effectiveness of various economic practices. The January CPI is especially important as it sets the tone for the year and influences the Fed’s annual path.
This January, the CPI index showed an inflation rate increase of 2.4% since January of 2025 for all items in the classic “market basket”. This number is lower than most economists expected. It's also the lowest that the CPI has been since May of 2025. This is a good indicator for the economy as a whole: a low number means that money is losing value at a slower rate than normal, reducing pressure on household budgets and giving the Fed more room to cut interest rates.
One key aspect that contributed to the decline in inflation is a decrease in gas prices. Driven by the Trump Administration’s quest for cheaper oil on the international stage, consumers have been seeing lower prices-per-gallon on gas nationwide. However, the report goes more in-depth: showing that key categories of goods are, in fact, rising– despite the lower overall inflation rate. Ground beef, appliances, furniture, and cars all saw sharp price increases between December and January. This increase is largely due to retailers passing on tariff costs to consumers. Another area that saw a sharp increase was medical care, which rose a shocking 12% from a year earlier. But taken together, the report shows that while prices are decreasing overall, this change does not come without its challenges beneath the surface.
In conjunction with a stronger-than-expected January Jobs Report, the new data from the CPI shows that overall, the American economy is staying strong despite being tested by tariffs and global trade uncertainty. As the Federal Reserve continues to pursue its fundamental goal of 2% inflation, this latest data will serve as an important benchmark for assessing market resiliency.
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