US inflation data for January presented a mixed picture, with price pressures remaining firm even as the headline annual pace eased slightly. The headline PCE price index rose 0.3%om, while the core measure—which excludes food and energy—increased by 0.4% min. Both readings matched market expectations and indicate that underlying inflation remains somewhat sticky.
On an annual basis, headline PCE inflation slowed modestly from 2.9% to 2.8%, coming in slightly below forecasts. However, core inflation edged higher from 3.0% to 3.1% year-on-year, highlighting persistent price pressures in the broader economy and reinforcing the view that the disinflation process remains uneven.
Consumer demand remained resilient during the month. Personal spending increased by USD 81.1B, or 0.4% mom, exceeding expectations of 0.3% mom. Meanwhile, personal income rose by USD 113.8B, also translating into a 0.4% monthly gain but falling slightly short of 0.5% mom forecasts.
