Consumer Prices Rose 0.4% in January

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A big jump in food and gas costs pushed consumer prices up in January, but outside those volatile categories inflation was relatively tame.

The Consumer Price Index rose 0.4 percent last month, matching December's increase, the Labor Department said Thursday. In the past year, the index has risen 1.6 percent.

Excluding food and energy, the core index rose 0.2 percent. That's the largest increase in more than a year. Core prices increased 1 percent over the past 12 months. That's higher than December's 0.8 percent annual pace, but well below the Federal Reserve's preferred range of closer to 2 percent.

Food prices increased 0.5 percent in January, the most in more than two years. Energy costs jumped 2.1 percent.

Other big price increases were reported for clothing and airfares. Clothing prices rose 1 percent in January, as apparel companies seek to offset the rising cost of cotton.

Airline fares increased for the fifth month in a row, rising 2.2 percent. Airlines are struggling with higher jet fuel costs. Delta Air Lines Inc. increased its business class fares earlier this week, a move quickly matched by its competitors.

The cost of housing, which makes up about 40 percent of the core index, rose 0.1 percent, reflecting increases in rents.

Commodities such as cotton, oil, corn, and other grains are pushing up costs for businesses, and some are rising their prices. But the impact hasn't broadly impacted consumers yet.

Some economists expect consumer prices, outside of food and energy, to tick up this year as more companies pass on their rising costs.

On Wednesday, the Labor Department said that wholesale prices, excluding volatile food and energy categories, rose in January at the fastest pace in more than two years.

In a separate report Thursday, the department said that more people applied for unemployment benefits last week, a week after applications fell to their lowest level in three years. The big drop had occurred because snowstorms in many parts of the country closed some government offices and kept people from applying for benefits.

The department said that the number of people applying for unemployment aid rose by 25,000 to a seasonally adjusted 410,000.

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vondeck

It's to bad we have to eat.

February 17 2011 at 6:31 PM Report abuse +1 rate up rate down Reply
1 reply to vondeck's comment
bansijeff

The inflation number generated by the federal government is 40% housing. Since housing is still in a deflationary spiral, the official government number for inflation is low. The inflation in goods and commodities is now offset by the deflation in housing. When housing bottoms out, inflation will show up in the government number.

February 17 2011 at 12:54 PM Report abuse +1 rate up rate down Reply
7 replies to bansijeff's comment
Michael

This is a great report to the Feds . Are they nuts stop the lies Fuel and food is up more then 0.4 percent Dam when i have to spend 1.00 per bell pepper and I am getting less products for your money I call that inflation

February 17 2011 at 11:31 AM Report abuse +2 rate up rate down Reply
1 reply to Michael's comment
Trevor

While food and fuel ARE up more than .4% (which is actually a relatively high number given that it is only for a single month), food and fuel are not the ONLY components of the CPI because they are not the ONLY things on which you spend money. Housing, for example, has generally been declining, and is the major item keeping inflation under control (although that is about to change). Other items such as consumer electronics continue to deflate. If the only thing you ever bought was bell peppers, you might have a point. Otherwise, not so much.

February 17 2011 at 1:43 PM Report abuse rate up rate down Reply
marine1942

Great news !! Except for fuel and food the government tells us we are fine.
Does anyone wonder why we do not believe Obama ????

February 17 2011 at 9:01 AM Report abuse +2 rate up rate down Reply
1 reply to marine1942's comment
Trevor

Why "except for food and fuel"?

February 17 2011 at 10:44 AM Report abuse rate up rate down Reply