Tag Archives: Rates

Annual U.S. Inflation Rises 2.6%, Consumer Prices Edge 0.2% Higher in January

The cost of living in the U.S. rose less than expected in January, as Americans paid less for new cars, clothes, hotels, homes and other shelter-related costs, the government reported Friday.

However, the price of energy continues to be a burden with increases during the month and year that drove inflation higher over the past 12 months, according to the Labor Department.

The Consumer Price Index (CPI), which is the government’s most closely watched barometer for measuring inflation at the consumer level, rose 0.2% in January for the fifth consecutive month. The figure is lower than the 0.3% increase most analysts were forecasting.

"Despite the extraordinary fiscal and monetary stimulus injected into the economy, many prices are still stagnant or declining," Dan Greenhaus, chief economic strategist for Miller Tabak, wrote in a research note on Friday that was quoted on NYTimes.com. Adding, "The pricing situation still remains fragile."

Continue reading Annual U.S. Inflation Rises 2.6%, Consumer Prices Edge 0.2% Higher in January

Annual U.S. Inflation Rises 2.7%, December Inflation Rate Climbs 0.1%

Consumer prices shifted slightly higher in December but the annual inflation rate jumped due to rising energy costs, the Labor Department reported Friday.

US consumer prices increased modestly at 0.1% last month, which was down from a 0.4% increase in November and marked the lowest reading since July. Most forecasters were expecting a 0.2% increase.

"Consumer pricing pressures remain very subdued," Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, was quoted on Bloomberg. "It gives the Fed further leeway to continue keeping rates where they are well through 2010."

The government’s Consumer Price Index, which measures inflation pressures at the consumer level, rose 2.7% on an annual basis in 2009 — the biggest gain since 2007. By comparison, American’s paid just 0.1% more for goods and services in 2008. The contrasting difference was primarily driven by higher energy prices, with gasoline up 53.5% in 2009 after declining 43.1% in 2008. Continue reading Annual U.S. Inflation Rises 2.7%, December Inflation Rate Climbs 0.1%

U.S. Inflation Jumps 1.8% in Past 12 Months, Consumer Prices Up 0.4% in November

US inflation over the past 12 months returned to positive territory for the first time since February, according to government data released Wednesday.

The latest Labor Department monthly report reveals that the Consumer Price Index, which measures inflation pressures at the consumer level, increased 1.8% from a year ago, and rose 0.4% in November.

The November reading was inline with most analysts’ expectations, and follows a 0.3% gain in October. The cost of living for Americans increased due to several categories, but was led by 4.1% jump in energy prices — the fourth straight monthly increase. Oil prices shot up 9%. Gasoline prices notably rose as well, soaring 6.4% in November after an increase of 1.6% in the month prior.

The so-called core consumer index that excludes the more volatile food and energy items was unchanged in November, marking the first month in ten without an increase. Analysts were expecting a 0.1% increase. The core CPI rose 0.2% in October. Continue reading U.S. Inflation Jumps 1.8% in Past 12 Months, Consumer Prices Up 0.4% in November

Annual U.S. Inflation Down 0.2%, Consumer Prices Rise 0.3% in October

U.S. consumer prices rose more than expected in October as higher fuel and new and used car prices drove up the cost of living for Americans, according to government data released Wednesday.

The newest Labor Department monthly report reveals that the Consumer Price Index (CPI) edged 0.3% higher, exceeding the 0.2% expectations voice by economists. The increase — the fifth in six months — follows a September elevation of 0.2% which came on the heels of a 0.4% rise in August.

"The latest CPI report does not alter the underlying picture and we continue to expect weaker inflation in 2010 as a result of the substantial amount of spare capacity in the economy," wrote Anna Piretti, an economist for BNP Paribas, who was cited on MarketWatch.

Energy prices were also up for the fifth time in the last six months. The indexes for gasoline, fuel oil, natural gas, and electricity all increased. New car prices rose sharply, jumping at a rate that has not been seen since the 1980s.

In October, core consumer prices or core inflation, which excludes volatile food and energy prices, rose by 0.2% after increasing by the same level in September. That was also 0.1% more than many analysts had expected. Continue reading Annual U.S. Inflation Down 0.2%, Consumer Prices Rise 0.3% in October

US Inflation Remains ‘Subdued’, Says Fed

The Federal Reserve ended its two-day meeting Wednesday, and as expected the Federal Open Market Committee (FOMC) did not raise interest rates. Further, in an exact parallel to its last statement, it noted that US inflation remained under control, stating:

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

September inflation data indicated that consumer prices declined 1.3% during the prior 12 months and that core annual inflation, which excludes volatile food and energy prices, rose just 1.5% — well within the Federal Reserve’s comfort range of between 1%-2%.

It appears its benchmark federal funds rate will remain virtually at zero for some time as the "economic activity is likely to remain weak for a time," according to the FOMC.

"The one consistent theme with all the Fed speakers is that they’re not going to raise rates any time soon," Drew Matus, an economist at Bank of America-Merrill Lynch, was quoted on NYTimes.com. "That is the one consistent theme that gets hammered home time and again."

In a unanimous vote, the FOMC decided to keep its key rate unchanged in a range of zero to 0.25 percent.

The released Fed statement follows in its entirety: Continue reading US Inflation Remains ‘Subdued’, Says Fed

US wholesale inflation drops as producer prices decline 0.6% in September

Sharply lower energy costs helped pull US wholesale inflation down as producer prices declined 0.6% in September and 4.8% on a year-over-year basis, the government reported Tuesday.

The latest Labor Department’s Producer Price Index number, which measures prices at the factory door and inflation pressures before they reach the consumer, follows 1.7% increase in August.

"Inflation is not an immediate concern," Ryan Sweet, an economist at Moody’s Economy.com in West Chester, Pennsylvania, was quoted on Bloomberg. "We’re probably going to see core inflation continue to soften over the next couple of months" and "this will likely keep the Fed on the sidelines for the foreseeable future."

Both food and energy prices at the wholesale level dropped in September, falling 0.1% and 2.4%, respectively. Continue reading US wholesale inflation drops as producer prices decline 0.6% in September

US Consumer Prices Edge Higher in September, 12-Month Inflation Down 1.3%

US consumer prices inched slightly higher but at a slower pace in September than in August, government released data revealed Thursday.

The Consumer Price Index rose 0.2% last month following a 0.4% increase in August, according to the latest monthly CPI report from the Labor Department. Excluding volatile food and energy prices, the so called core CPI also increased by 0.2%. The same August reading was up by 0.1%.

The latest data again eases concerns of rising inflation — at least for now — as a result of the Fed injecting an unprecedented amount of money into the US economy to stir the recovery.

"Today’s figures won’t shift the argument about inflation risks at the Fed. They don’t show deflation, but nor do they show sufficient inflation pressures to make the doves want to tighten soon," Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, was quoted on Reuters.

Continue reading US Consumer Prices Edge Higher in September, 12-Month Inflation Down 1.3%

Fed: Economy has ‘Picked Up’, US Inflation ‘Subdued’

The Federal Reserve ended its two-day meeting Wednesday, and the Federal Open Market Committee (FOMC) held interest rates steady near zero, as expected. The FOMC followed the meeting with a statement saying that "economic activity has picked up." It also indicated US inflation was under control, stating:

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

To provide support to mortgage lending and housing markets, the Fed noted that it expects to finish purchases of "$1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt" in a slowing pace until the first quarter of 2010.

August inflation data showed that consumer prices had decreased 1.5% during the prior 12 months and that core annual inflation, which excludes volatile food and energy prices, rose just 1.4%. That was the smallest year-over-year gain since February 2004, and well within the Federal Reserve’s traditional comfort zone of between 1%-2%. Continue reading Fed: Economy has ‘Picked Up’, US Inflation ‘Subdued’

Annual US inflation Down 1.5%, August Consumer Prices Higher on Energy Costs

U.S. consumer prices rose slightly in August but the key measure of inflation remained lower over the past 12 months, the government reported Wednesday morning.

Led by a 9.1% increase in gasoline prices, the Consumer Price Index rose 0.4% in August and followed no change in July, according to the Labor Department. The core CPI, which excludes volatile energy and food prices, increased 0.1% in August, the same level as July.

"For inflation to be a concern, we’d have to see core rates rising consistently above 0.2% each month and wages start to rise," PNC analyst Robert Dye was quoted on CNNMoney. "The labor markets are far from healed enough for that to happen."

The latest data also helps to ease concerns of rising inflation due to recent government spending and the Federal Reserve monetary policy of injecting cash into the US economy in a continuing effort to stimulate a recovery. Continue reading Annual US inflation Down 1.5%, August Consumer Prices Higher on Energy Costs

US wholesale inflation higher as August producer prices rise 1.7%

US wholesale inflation ticked higher in August as producer prices rose 1.7% during the month, according to newly released data from the Labor Department. The monthly increase contrasts against a 0.9% decline in July, and is sharply above — more than double — what many analysts were expecting.

"We are concerned about the outlook for inflation later in 2010 and this report suggests that inflation pressures may be beginning to stir in manufacturing," John Ryding and Conrad DeQuadros of RDQ Economics was quoted on MarketWatch.com.

The Labor Department’s Producer Price Index data, which measures prices at the factory door and inflation pressures before they reach the consumer, showed the bulk of the increase came from higher energy costs. Continue reading US wholesale inflation higher as August producer prices rise 1.7%