cpi022108
On the homepage
Thanksgiving
Out There
Vikings
Pardon Board
January core inflation rose most in 7 months
Print this story
E-mail this story
Save to del.icio.us
Share on Facebook
Share on Digg
Minnesota business by the numbers
See Minnesota's top earning companies, CEOs and non-profits
More from Business
WASHINGTON - Consumers paid more to fill their gas tanks and buy groceries and other goods and services in January.
The Labor Department reported that its consumer price index rose 0.4 percent last month. That matched the December increase and was higher than the 0.3 percent rise analysts had expected. Food costs jumped by the largest amount in 11 months.
Core inflation, which excludes food and energy, rose by 0.3 percent, the most in seven months, reflecting higher prices for medical care, education, clothing, tobacco and air fares.
With the latest increase, core prices have risen by 2.5 percent over the past 12 months, far above the Fed's comfort zone of 1 percent to 2 percent gains. The increase in inflationary pressures comes as economic growth has slowed sharply, raising concerns the country might be falling into a recession.
The Fed last month began an aggressive campaign to cut interest rates. Analysts said they believe the Fed will see the threat of a recession as a bigger risk at the moment than the rise in inflation. But some predicted that the Fed might cut rates by one quarter of a percentage point at its March 18 meeting rather than the half-point move that markets are expecting.
A second report Wednesday showed that the housing sector remains in a steep downturn. Residential construction rose 0.8 percent in December to an annual rate of 1.012 million units. But all the strength came from a rebound in apartment construction, which had plunged in December. The larger single-family sector fell by 5.2 percent last month.
ASSOCIATED PRESS
Recent Business stories
Ex-French spy's escape, failed submarine venture with Dubai firm finds its way to Fla. court - February 20, 2008
Ex-French spy's escape, failed submarine venture with Dubai firm finds its way to Fla. court - Former French intelligence officer Herve Jaubert believed he was essentially being held captive in Dubai when his passport was confiscated by authorities amid a dispute with his employer, a powerful government-run conglomerate. He claimed he was threatened with torture and worried each day he would be arrested. More
Blog: Patent Pending
Lights out at U energy conference. Irony police notified.
Just as Lawrence Kazmerski, a top official at the National Renewable Energy Laboratory, was about to give the keynote address at the University of Minnesota's annual E3 conference at the RiverCentre in St. Paul, the lights went out, bathing the audience in darkness and a deep sense of irony.
Comment on this story | Read all 1 comments | Hide reader comments