The latest inflation report shows prices were up in January, pushing the annual inflation rate to 3%. News 6 Anchor Lisa Bell spoke with CBS News business analyst Jill Schlesinger to dig deeper into the Consumer Price Index.
Bell: So, Jill, what did the January numbers reveal?
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Schlesinger: So prices increased in the month of January and that pushed up the annual inflation rate to 3% and that’s a little bit hotter than we had in the previous month. We were at 2.9%, we went to 3%. The core rate removes food and energy. That was up to 3.3% from a year ago. Again, a 10th of a percent higher than where we were in December. Just a quick note, because I know we’ve been reporting on every single station that egg prices are going bananas. Get it? Eggs, bananas. I’m keeping it in the food family. Egg prices were up 15% in January. This is avian flu, really the big problem here, and they’re up by 50% from a year ago. I have a solution for everybody. I don’t want you to think I’m being encouraged by big oatmeal or anything, but I think you should ditch your eggs and you should try oatmeal because cereal prices were down in January, so no eggs go to cereal.
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Bell: Well, that is interesting. So besides bird flu, what do you think is affecting the cost of goods?
Schlesinger: Well, listen. Eggs are ridiculous because it’s just this one category. What we do know is that the combined cost of doing business for a lot of different companies is being passed along to consumers. So it could be everything from, you know, it’s costing more to fill your tank up, not a lot more, but energy prices. We know that there are problems in the shelter, like I know in your area, that prices for homes and rents, they have gone up very dramatically. While the rate of increase is coming down, it’s still a big chunk of a family’s budget. Auto insurance went up dramatically. It came off a little bit, but the big-ticket items are still very expensive. And so what we really need to see is what we have been seeing for, say, the past 6 or 10 months, which is wages have been rising faster than the inflation rate. We know that, but it hasn’t caught up yet for a lot of families. So that’s what we’re kind of hoping for, is that as you keep making a little bit more money. Price increases, you know, they settle in a little bit. You stay ahead of that inflation rate and you make up lost ground and that’s what usually happens when we come out of a high inflationary period like we’ve just been in.
Bell: Well, we’ve also been talking a lot lately about tariffs with the most recent announced tariffs being on steel and aluminum, which are set to go into effect next month. If that happens, what sort of impact could that have on inflation?
Schlesinger: You know, it’s so interesting because every single announcement has a knock-on effect, right? So steel, aluminum, it only accounts for a fractional percentage of United States imports. But, you know, could that in addition to car parts, in addition to other things, start to push up the price of a car the finished good to a consumer? Sure. But what I think we really need to remember is we’ve had a lot of announcements and some of those announcements have been put on ice. Right. We’ve had frozen announcements with Canada and Mexico. But the concern is that if we saw every single tariff that’s been announced go into effect and then every single retaliatory tariff go into effect, we could see higher prices across the board. We’re not going back to 9% inflation. So when I say higher prices, the combined impact of the announced tariffs and retaliation, I think that that looks like inflation moves from, say, 3% today to 3.5% later this year. I know it’s not great news, but the President has said that this is the price that he believes is worth paying. Every consumer is going to have to make that decision for themselves, whether it’s worth it or not.
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