US CPI data for January 2023 will be a key indicator for the market observers, analysts, investors and traders to gauge the level of price rise in the economy. The January inflation numbers are to be released by the US Bureau of Labor Statistics (BLS) on February 14 at 8:30 A.M. Eastern Time.

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For the first time, a new approach is to be applied when generating January CPI data that will be reflected in US inflation figures. Beginning in 2023, the Bureau of Labor Statistics will change the method of calculating inflation data. The release of the January 2023 CPI data on Friday, February 14, 2023, will mark the start of the transition to yearly weights. 

The BLS intends to update weights for the Consumer Price Index yearly based on data from a single calendar year, starting with data from January 2023 and using consumer expenditure data from 2021. This represents a departure from the previous practice of changing weights every two years using data from two years of expenditures.

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Also, each year with the release of the January CPI, seasonal adjustment factors are recalculated to reflect price movements from the just-completed calendar year. This routine annual recalculation may result in revisions to seasonally adjusted indexes for the previous 5 years. Recalculated seasonally adjusted indexes as well as recalculated seasonal adjustment factors for the period January 2018 through December 2022 were made available on Friday, February 10, 2023.

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With the publication of January 2023 data in February 2023, the following changes will go into effect:

The title of the cable and satellite television service index is being changed to cable, satellite, and live streaming television service.

The title of the video discs and other media, including rental of video index is being changed to purchase, subscription, and rental of video.

The title of the rental of video discs and other media index is being changed to subscription and rental of video and video games.

The title of the baby food index is being changed to baby food and formula.

From 7.1% in November, the inflation fell to 6.5% in December and now the stock market investors expect the annual inflation to trend even lower as has been seen over the last few months. However, any negative surprise may spook the market sentiments.

Meanwhile, Fed Chief Powell has been talking about ‘disinflation’ but the strong job market may play the spoilsport in Fed’s action plan. Fed officials remain hawkish and have already pointed towards more rate hikes unless inflation is fully controlled and brought under target range of 2%.