Skip to comments.Gas Lifts Consumer Costs but Not Enough to Alarm Fed
Posted on 03/15/2013 10:15:16 AM PDT by 1rudeboy
WASHINGTONA monthly reading of U.S. consumer prices rose the most in nearly four years in February because of higher fuel costs, though a recent drop in gasoline prices suggests temporary inflation pressure that isn't likely to alarm Federal Reserve officials.
The seasonally adjusted index of consumer prices jumped 0.7% last month, the biggest increase since June 2009, the Labor Department said Friday. The gasoline index alone surged 9.1%, accounting for nearly three-fourths of the gain. Overall energy prices climbed 5.4% after declining the previous three months.
Core prices, which exclude the volatile food and energy sectors, increased 0.2%.
The Fed has been closely monitoring inflation as it pumps money into the financial system. The easy-money policies are meant to spur investment and boost employment, though some critics have worried that they could also lead to too-high inflation.
"Despite the sharp rise in headline prices and some modest firming in core consumer-inflation pressures, the overall backdrop for consumer prices remains favorable, providing further breathing room for the Fed to remain accommodative," said Millan Mulraine with TD Securities.
Fed officials project overall inflation to stay between 1.3% and 2% in 2013well below the 2.5% threshold they have set to begin raising interest rates. The central bank's policy makers next meet March 19-20.
Friday's report said that year-over-year, consumer prices were up 2% and core prices rose 2%, matching the Fed's target for annual inflation.
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What do they count? I can’t think of anything that hasn’t gone up.
as long as your don’t use food or energy, everything is fantastic.
Friday’s report said that year-over-year, consumer prices were up 2% and core prices rose 2%, matching the Fed’s target for annual inflation.
Somehow my budget seems to say otherwise. Maybe my “market basket” is defective somehow.
Ben "Inky" Bernanke wouldn't be alarmed if people were burning stacks of million dollar bills to keep warm.
Yeah. Have automobiles and clothing averaged 2% increases per year? I think not.
They’re creating, out of thin air, $85 billion a month, $1 Trillion per year,
“UNTIL IT WORKS”.
The US is like that family in 2007 riding a wave of false prosperity based on maxxed out credit cards and helocs on a house with negative equity.
Instead of two leased luxury SUVs and a McMansion, we’ve got election-friendly entitlements.
Exactly how does the fed “put” the $85 billion into the market?
Of course it doesn’t. Why should it when they can just make legislation throwing it on someone else’s shoulders to pay for?
Just went and filled up on Thursday. The price per gallon went down. I was a little taken back by it.
They have been steadily rising over the past month. I’m sure once summer comes around, gas prices will skyrocket.