January Inflation Preview

A Change in Seasonals

Tomorrow the government is set to publish its estimate for January CPI. La Rue is bracing potential for another “New Year, New Prices” uptick.

This is not unwarranted given the post pandemic Q1 seasonal effect where Q1 has been the hottest of the year, with the inflationary pressures concentrated in January.

Based on the latest data surface, there is marginally less upside to Core CPI than what the consensus expects, as this year likely breaks with the post pandemic hot January New Year/New Prices effect.