40-Year High

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What's Happening Today

Good morning! It's Kristin with your daily morning digest.

In a blow to consumers' wallets, inflation rose 0.6% last month, and 7.5% since last year—the biggest annual increase since 1982, according to the Bureau of Labor Statistics' (BLS) latest report on the Consumer Price Index (CPI). The CPI measures the rising costs of consumer goods and services in the United States, and serves as an important gauge of inflation in the country. Today's CPI numbers were higher than expected. Economists had expected a 0.4% increase in January, and 7.2% from a year ago.

The core inflation rate, which excludes more volatile food and energy prices, rose 0.6% in January, and 6% from last year. That 6% annual jump was also the largest in 40 years, and shows that costs surged across the board, as prices for the majority of items in the index climbed. And while gas (all types) was one of the few measures to see prices decline in January, it's still a whopping 40% higher than a year ago, the BLS reported.

Stocks are falling on the news, as rising inflation rates bolster the Federal Reserve's argument for raising interest rates. Meanwhile, bond yields are rising ahead of rate hikes, with the yield on the benchmark 10-year Treasury note jumping to 1.98% after a sell-off in Tuesday and Wednesday's trading sessions.

- Kristin

Editors' Picks

Inflation Jumps to 7.5% in January, Jobless Claims Fall (The Balance)

Most CEOs Say Rate Hikes Won't Quickly Solve Inflation Crisis (CNN Business)

Student Loan Repayment Looms Over Consumer Debt Picture (The Balance)

Why High Gasoline Prices Could Stick Around for a While (The Wall Street Journal)

Off the Charts

Wondering where first-time homebuyers are getting the money for today's increasingly exorbitant down payments? Those stimulus checks most of us received from the government, for one.

A recent survey of 215 first-time buyers shows what some economists have suspected all along—that many people took those pandemic relief checks (three rounds totaling up to $3,200 per person in 2020 and 2021) and applied them toward down payments. As the chart below shows, it was the second-most common answer the real estate firm Redfin received from survey respondents who were asked how they accumulated the money for a house.

Number of the Day

2 - That's how many times Starbucks has raised its prices in the last three months, and the coffee giant isn't done.

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