Consumer Prices Rise Slightly, Easing Inflation Fears

eaglefly

Consumer Prices Rise Slightly, Easing Inflation Fears
Published:                                                Friday, 19 Feb 2010 | 8:36 AM ET



By: Reuters




U.S.consumer prices rose less than expected in January, while pricesexcluding food and energy fell for the first time since 1982, accordingto a government report on Friday that soothed worries inflationpressures were starting to build up.

The Labor Departmentsaid its seasonally adjusted Consumer Price Index rose 0.2 percent lastmonth, lifted by a spike in energy costs, after rising 0.2 percent inDecember.

Analysts polled byReuters had forecast consumer prices rising 0.3 percent in January.Compared to January last year, prices rose 2.6 percent, also belowmarket expectations for a 2.8 percent increase.

Energy costs soared2.8 percent last month after rising 0.8 percent in December. Foodprices climbed 0.2 percent following a 0.1 percent gain in December.

A surprise surge inprices paid at the farm and factory gate last month, owing to highergasoline costs, had fanned fears that inflation pressures could soonweigh on the economy, which is recovering from the most brutalrecession in 70 years.



Stripping outvolatile energy and food prices, the closely watched core measure ofconsumer inflation fell 0.1 percent in January, the first decline sinceDecember 1982. Core prices rose 0.1 percent the prior month.

Analysts had expectedcore prices to rise 0.1 percent. Core prices were pulled down bydeclining costs for new vehicles, shelter and airline fares. Highvacancy rates are keeping rentals depressed.

Compared to January last year, the core inflation rate rose 1.6 percent after increasing 1.8 percent in December.
Copyright 2010 Reuters. Click for restrictions.

eaglefly

'Stripping outvolatile energy and food prices, the closely watched core measure ofconsumer inflation fell 0.1 percent in January....'

ha?  stripping energy and food prices? what else we need?