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The US Labor Department on Tuesday reported that the Consumer Price Index, a key measurement of inflation, rose 0.5% on a monthly basis in January after increasing just 0.1% in December.

Viewed annually, inflation is still easing, though the pace is slowing. The overall cost of goods and services is 6.4% higher than in January 2022 – a rate significantly lower than the record 9% annual inflation rate seen in July. Nevertheless, a 6.4% annual inflation rate still exceeds the 2% goal set by the Federal Reserve Board, which is trying to cool the economy and tamp down inflation with interest rate hikes.

As investors weighed whether the news was good or bad for the economy, stocks fluctuated between losses and gains on Tuesday morning. Although the slight decline in the annual inflation rate from 6.5% to 6.4% for the 12-month periods ending in December and January was seen as a positive, investors were also concerned that the monthly increase in prices shows the pace of the annual decline in inflation is slowing and could prompt the Fed to raise interest rates more steeply at its March meeting.

The index for shelter was by far the largest contributor to the monthly all-items increase between December and January, with the indexes for food, gasoline, and natural gas also contributing. The food index increased 0.5% over the month and the energy index increased 2% percent over the month.

The less volatile core index – all items less food and energy – rose 0.4% in January. Categories in the core index which saw price increases in January included shelter, motor vehicle insurance, recreation, apparel, and household furnishings and operations indexes. The indexes for used cars and trucks, medical care, and airline fares were among those that decreased over the month.

The all-items-index increase of 6.4% for the 12 months ending January was the smallest 12-month increase since the period ending October 2021. The all-items-less-food-and-energy index rose 5.6% over the last 12 months, its smallest 12-month increase since December 2021.

The energy index increased 8.7% for the 12 months ending January, and the food index increased 10.1% over the same period.