Here’s fresh evidence that price of practically every thing has moved higher still as inflation refuses to be tamed. The markets meanwhile have completely shrugged it off, turning heavily to the upside this afternoon. Go figure.
From AP by Martin Crutsinger entitled: Consumer Prices Post Another Big Gain
Consumers paid more to fill up their gas tanks, buy groceries and go to the hospital in January as prices on a wide range of items pushed higher.
Inflation was increasing even as the economy was slowing dramatically, a development certain to raise concerns at the Federal Reserve, which has been cutting interest rates aggressively in the belief that fighting off a threatened recession was more important than worrying about inflation pressures.
The Labor Department reported that its closely watched Consumer Price Index posted a gain of 0.4 percent last month, matching the December increase and higher than the 0.3 percent rise that analysts had expected. Food costs jumped by the largest amount in 11 months, led by big gains for vegetables, fruit, poultry and pork.
Core inflation, which excludes food and energy, rose by 0.3 percent, the biggest jump in this measure in seven months. That increase reflected higher prices for medical care, education, clothing, tobacco and airline fares.
With the latest increase, core prices have risen over the past 12 months by 2.5 percent, the biggest jump in 10 months and far above the Fed’s comfort zone of 1 percent to 2 percent gains in the underlying inflation rate. The increase in inflation pressures is coming at a time when economic growth has slowed sharply, raising concerns that the country might be in danger of falling into a recession.
“The economy may be faltering, but that has not stopped firms from raising prices,” said Joel Naroff, chief economist at Naroff Economic Advisers. “It didn’t matter whether you went to the supermarket or ate out, costs were up.”
It’s not exactly news, of course, but I guess it could be much worse-like it is in China.
Inflation there surged to an 11 year high as it hit the 7.1% mark in January.
Food, which makes up one third of all the spending by Chinese consumers, led the move higher it rose 18.2 % in January over the previous year. Pork prices took the top prize rising some 58% over prices versus last year.