Inflation Still Too High But Gliding Down

January’s CPI release today showed that inflation is continuing to moderate, though perhaps more slowly than it did during the second half of 2022. The headline and core CPI rose 6.4% y/y and 5.6% through January down from 6.5% and 5.7% during December (chart).

The CPI for all consumer goods rose 4.5% y/y in January, down from 4.8% in December and down from the March 2022 peak of 14.2% (chart). Fed Chair Jerome Powell recently remarked that consumer goods prices are disinflating. They certainly are doing just that.