MSNBC graphic stating: “Inflation rate 3.1% in Jan., higher than expected.”

Research/Study Research/Study

News headlines turn a good inflation report into a bad one by focusing on missed expectations

The annual inflation rate declined from 3.4% to 3.1% in January, but some major news organizations failed to mention the decline in their headlines while others fixated on inflation being slightly higher than expected

Written by Zachary Pleat

Research contributions from Eric Kleefeld

Published

According to the Bureau of Labor Statistics, the annual inflation rate declined in January, a welcome sign for the entire American economy, but major news organizations chose to put a negative spin on the data by emphasizing that the reported annual rate was slightly higher than economic forecasts had predicted. 

Yet multiple economists responded to the BLS report by arguing that this latest inflation number continues a positive trend as price fluctuations have come under control and that the missed forecast may simply be due to inflation typically running hotter in January.

  • Annual inflation rate declined in January, though economic forecasters expected a slightly larger drop

    • The Bureau of Labor Statistics announced that the Consumer Price Index “rose 3.1 percent for the 12 months ending January, a smaller increase than the 3.4-percent increase for the 12 months ending December.” The CPI — a measure of inflation based on the “average change over time in the prices paid by urban consumers for a market basket of consumer goods and services” — “increased 0.3 percent in January on a seasonally adjusted basis, after rising 0.2 percent in December.” [Bureau of Labor Statistics, 2/13/24]
    • Estimates predicted a slightly lower annual inflation rate of 2.9-3%. Bloomberg reported that its in-house Bloomberg Economics forecast model had expected the annual inflation rate to hit 3% in January and that “consensus estimates” of other economists surveyed in anticipation of the BLS report had expected to see 2.9%. [Bloomberg, 2/13/24]
    • CNN’s Sara Sidner opened a segment on the inflation report by calling it “another sign the economy is getting better and better” with “some good news for consumers,” then hosted White House Council of Economic Advisers Chairman Jared Bernstein to comment on it. Sidner said: “The first big inflation report of 2024 spelled some good news for consumers. Prices rose by 3.1% for the last 12 months. That's a slight pullback from December's rate, but not as much as economists had expected.” Bernstein then noted that inflation continued to decline as the labor markets remained “very strong, and that is a recipe for rising inflation-adjusted paychecks.” [CNN, CNN News Central, 2/13/24]

  • Economists explained that a disappointing CPI report still showed progress in tackling inflation, and that inflation often runs slightly higher in January

    • University of Massachusetts Amherst economic professor Arindrajit Dube: “Updated price data shows that wage growth continues to outpace price growth, leading to strong real wage growth.” [Twitter/X, 2/13/24]
    • Former Federal Reserve economist Claudia Sahm: The inflation report “does not erase 6 months of clear progress” and “January has been hot the past few years.” Sahm further explained: “There is nothing in today's CPI that suggests a reacceleration of inflation.” [Twitter/X, 2/13/24, 2/13/24]
    • Burning Glass Institute economic research director Guy Berger noted that there are concerns that inflation data in January is “exaggerating inflation.” Berger also posted, “I wouldn't freak out about the steamy January CPI data.” [Twitter/X, 2/13/24, 2/13/24]
    • Moody’s Analytics chief economist Mark Zandi: “The January report on consumer prices was disappointing but doesn’t change the trend of decelerating inflation nor prospects for inflation to return to the Fed’s target by the 2nd half of the year.” [Twitter/X, 2/13/24]

  • Major news organizations prioritized reporting that the annual inflation rate missed expectations

    • The New York Times: “A key inflation gauge came in hotter than expected last month.” [The New York Times, 2/13/24]
    • CBS News: “Inflation ran hotter than expected in January, complicating the Fed's rate decision.” [CBSNews.com, 2/13/24]
    • CNN: “Dow nosedives by 700 points as hot inflation data stokes fears about higher-for-longer rates.” [CNN.com, 2/13/24]
    • Politico: “Biden’s bout with inflation just suffered another setback.” [Politico, 2/13/24]
    • Axios: “Consumer Price Index is hotter than expected in January.” [Axios, 2/13/24]
    • Reuters: “Wall St sinks as hot inflation data dampens early rate-cut hopes.” [Reuters, 2/13/24]
    • MSNBC’s Ana Cabrera: “Brand-new data showing inflation continued to cool last month, but not quite as much as experts predicted.” Cabrera added, “Not quite the good, rosy picture that economists had predicted,” even though the decline in the annual inflation rate missed expectations by only 0.1-0.2 percentage points. [MSNBC, Ana Cabrera Reports, 2/13/24]
    • NBC News: “Price growth continued to cool in January, but not as much as hoped for.” [NBCNews.com, 2/13/24]
    • The Washington Post: “Inflation eased in January, but not as much as expected.” [The Washington Post, 2/13/24]