US inflation rises
US petrol prices jumped 0.9 per cent in January, pushing overall consumer prices up at their fastest pace in four months and offering a reminder of the risks energy costs could pose to the economic recovery.
The Consumer Price Index rose 0.2 per cent, according to figures from the Labor Department is unlikely to ring alarm bells at the Federal Reserve, which is trying to decide whether the economy needs another dose of monetary stimulus.
“(The data) doesn’t prevent another round of quantitative easing to stimulate the economy,” said Brian Kim, a currency strategist at the Royal Bank of Scotland in Stamford, Connecticut.
The rise in prices was just below analysts’ expectations of a 0.3 per cent increase.
The gain in gasoline prices was the first in four months. Tensions in the Middle East have been pushing oil prices higher, leading to extra costs at the pump for Americans.
After rising throughout January, the national price for regular unleaded gasoline prices rose to $3.58 a gallon in the week through Monday, according to the Energy Information Administration. It had started the year around $3.32 a gallon.
The Labor Department report showed that after stripping out food and energy, the so-called core reading rose 0.2 percent, which was in line with expectations.
However, the report also showed the rate of core price increases in the twelve months through January unexpectedly climbed to 2.3 per cent.
The increase in the 12-month core reading, which is seen as a barometer of inflation trends, might be read as a sign that inflation pressures are not subsiding as quickly as expected.