U.S. retail sales unexpectedly fell in January and December figures were revised downward, suggesting consumer spending is on a slower track in the first quarter.
Including all items, the main CPI gauge rose 2.1% from a year earlier, the same pace as in December and exceeding forecasts for a 1.9% increase.
The report follows the Labor Department’s annual revisions to CPI last week that took the December monthly increase in the core index down to 0.2%, from an initially reported 0.3%. The December gain in the main index was revised upward to 0.2% from 0.1%.
Policy makers look at the core index to better gauge underlying inflation because food and energy prices tend to be volatile. The latest report showed energy prices rose 3% from the previous month and food costs advanced 0.2%.
The two main U.S. stock indexes endured wild swings last week on concerns that inflation would spur higher interest rates more quickly, boosting borrowing costs for companies. Even so, equities have recovered some ground, advancing for three trading sessions in a row through Tuesday.
Retail sales fell 0.3% in January from the previous month, the most since February 2017, according to the Commerce Department, compared with the median estimate of economists for a 0.2% increase. December’s figures were revised to show little change, after an initially reported gain of 0.4%.
