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February 20, 2008
CPI Up 0.4 Percent Last Month
By THE ASSOCIATED PRESS
Filed at 8:56 a.m. ET
WASHINGTON (AP) -- Consumer prices rose by a bigger-than-expected amount in
January, reflecting big increases in the cost of food and health care, the
government reported Wednesday.
The Labor Department said that its closely watched Consumer Price Index
posted a gain of 0.4 percent last month, matching the December increase and
was higher than economists had expected.
Core inflation, which excludes food and energy, showed an increase of 0.3
percent, the biggest jump in this measure in seven months.
The higher inflation readings were certain to attract the attention of the
Federal Reserve, which has been cutting interest rates aggressively to ward
off a recession. The Fed has said that it believes the sharp economic
slowdown would keep inflation pressures from rising.
In other economic news, the Commerce Department said that construction of
new homes and apartments rose by 0.8 percent to a seasonally adjusted annual
rate of 1.012 million units in January. That was the first increase since
October and followed a plunge of 14.8 percent in December.
However, applications for building permits, considered a good sign of where
construction is headed, fell by 3 percent to an annual rate of 1.048 million
units, the lowest level since November 1991. That was viewed as evidence
that the nation's troubled housing sector has yet to hit bottom.
The prolonged decline in housing, with falling sales and weak prices, has
been a major drag on the overall economy. Growth skidded to a near
standstill in the final three months of last year, rising at an annual rate
of just 0.6 percent.
Some economists believe growth in this quarter and the next will turn
negative, fulfilling the classic definition of a recession . To combat the
economic weakness, Congress passed a $168 billion economic stimulus package
to provide tax rebates to more than 130 million American families.
The Federal Reserve acted in January to aggressively cut interest rates with
more rate cuts expected. However, the resurgent inflation pressures put Fed
policymakers in the uncomfortable position of having to worry about both
weaker growth and rising inflation.
CPI Up 0.4 Percent Last Month
By THE ASSOCIATED PRESS
Filed at 8:56 a.m. ET
WASHINGTON (AP) -- Consumer prices rose by a bigger-than-expected amount in
January, reflecting big increases in the cost of food and health care, the
government reported Wednesday.
The Labor Department said that its closely watched Consumer Price Index
posted a gain of 0.4 percent last month, matching the December increase and
was higher than economists had expected.
Core inflation, which excludes food and energy, showed an increase of 0.3
percent, the biggest jump in this measure in seven months.
The higher inflation readings were certain to attract the attention of the
Federal Reserve, which has been cutting interest rates aggressively to ward
off a recession. The Fed has said that it believes the sharp economic
slowdown would keep inflation pressures from rising.
In other economic news, the Commerce Department said that construction of
new homes and apartments rose by 0.8 percent to a seasonally adjusted annual
rate of 1.012 million units in January. That was the first increase since
October and followed a plunge of 14.8 percent in December.
However, applications for building permits, considered a good sign of where
construction is headed, fell by 3 percent to an annual rate of 1.048 million
units, the lowest level since November 1991. That was viewed as evidence
that the nation's troubled housing sector has yet to hit bottom.
The prolonged decline in housing, with falling sales and weak prices, has
been a major drag on the overall economy. Growth skidded to a near
standstill in the final three months of last year, rising at an annual rate
of just 0.6 percent.
Some economists believe growth in this quarter and the next will turn
negative, fulfilling the classic definition of a recession . To combat the
economic weakness, Congress passed a $168 billion economic stimulus package
to provide tax rebates to more than 130 million American families.
The Federal Reserve acted in January to aggressively cut interest rates with
more rate cuts expected. However, the resurgent inflation pressures put Fed
policymakers in the uncomfortable position of having to worry about both
weaker growth and rising inflation.
