Today's Scoop:

Hey friends, happy Valentine's Day! If we could put this card with a little candy on your desk we would.

Here's what you need to know today...

1. Inflation picked up again in January.

2. Living costs rose more than wages last month.

3. Small business owners are very pessimistic.

S&P 500: 4,136.131Mo: +4% | 1Yr: -8% | 5Yr: +51%

The market didn't move much today without any big surprises in the critical inflation report.

Inflation picked back up in January, as gas prices started rising again and rents kept climbing. The Bureau of Labor Statistics reported the Consumer Price Index [🤓] rose 0.5% last month, and basically everything we spend money on is still 6.4% more expensive than a year ago. Food prices haven't lost any steam, increasing steadily every month.

Living costs are rising more quickly than wages. The Labor Department reported average hourly earnings declined by 0.2% in January when adjusting for inflation. Since our incomes are not keeping up with inflation, our earnings buy less stuff, so workers are essentially making 1.8% less than a year ago.

Small businesses are pretty pessimistic. The National Federation of Independent Business reported its Small Business Optimism Index rose slightly in January but remains near decade lows. Business owners are still struggling with rising costs and staffing issues.

Click to dig in & vote your reaction, see how others feel

• Amazon's cut on marketplace sales reaches 50%

• Ford bets big on US EV batteries

• General Motors secures a US supply chain

• Palantir posts its first profit

• Coke faces pushback on higher prices

(These links only work for 24 hours while the story is live)

Consumer Price Index (CPI) & Inflation

The Consumer Price Index (CPI) is one of the main ways economists track inflation. Inflation is the rate at which things get more expensive.

The CPI looks at a set basket of stuff your average consumer spends money on and tracks how much it costs each month. The rate of change is inflation. Prices rarely go down. It's normal for things to get more expensive. You'll never be able to buy a Coke for a quarter again, but that's ok. Low inflation (~1-2% per year) is standard. High inflation, like we're seeing now with prices of essential goods going up nearly 5-10% per year, is a problem. It's unmanageable, especially if our incomes aren't rising in tandem. Policymakers are looking to slow economic activity and cool spending, so prices stop rising so quickly.

Want to create your own newsletter? Publish on beehiiv.