Pain at the Pump and in the Wallet: Surging Gas Prices Fuel Inflation Spike

Friday, 17 Feb 2012 10:05 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
U.S. gasoline prices jumped 0.9 percent in January, pushing overall consumer prices up at their fastest clip in four months and offering a reminder of the risks energy costs could pose to the economic recovery.

Still, the 0.2 percent increase in the Consumer Price Index reported by the Labor Department on Friday 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 percent increase.
_________________________________________________________


Editor's Note: Exposed: You Owe It to Yourself to Learn What Obama and Bernanke Are Hiding From Americans
This gripping Newsmax investigative report reveals the truth about America's economic future and the disastrous path that Obama’s and Bernanke’s reckless policies are taking us down. Watch, learn, and receive a free Survival Guide ($49 value) for your personal financial future. Click Here Now.

_________________________________________________________

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 percent.

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.

 At the close of its January meeting, the Fed said it would likely keep interest rates at rock-bottom levels until at least late 2014. Fed Chairman Ben Bernanke expressed caution about recent improvements in the economy and left the door open to further Fed bond buying to boost growth.

U.S. stock investors shrugged off the inflation data. U.S. Treasury debt prices held at lower levels.

Earlier, world stocks hit a fresh 6-1/2 month high and the euro held above recent lows as hopes Greece will seal a long-awaited bailout deal next week fuelled risk appetite.

Overall consumer prices rose 2.9 percent year-on-year after increasing 3.0 percent in December. That was in line with economists' expectations.

Moderating the monthly gain in core prices, used car and truck prices fell 1.0 percent and new vehicle prices were flat.

Editor's Note: Exposed: You Owe It to Yourself to Learn What Obama and Bernanke Are Hiding From Americans
This gripping Newsmax investigative report reveals the truth about America's economic future and the disastrous path that Obama’s and Bernanke’s reckless policies are taking us down. Watch, learn, and receive a free Survival Guide ($49 value) for your personal financial future. Click Here Now.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web
Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved