Consumer prices rose 0.3% in December, above the 0.2% consensus estimate, but the core rate rose just 0.2%, in-line with the 0.2% consensus estimate, the U.S. Labor Department announced Wednesday.Prices at the retail level increased at an above-average rate during 2007. For 2007, consumer prices increased 4.1% - - the biggest increase since 1990. Energy prices rose 17.4% in 2007 while food advanced 4.9%.
Meanwhile the core CPI rate increased 2.4% last year - - above the Federal Reserve's 'comfort zone' for inflation. The Fed uses the core CPI rate as the primary gauge of consumer-based inflation.
In December, energy prices rose 0.9%, gasoline increased 1.1%, natural gas climbed 2.3%, medical expenses increases 0.3%, and housing prices rose 0.3%.
Economic Analysis: A lukewarm CPI statistic. December's 0.3% CPI increase was above the consensus estimate, but the core CPI rate rose just 0.2%. The December core statistic should help convince the Fed that inflation - - while still at intolerable levels as measured by the producer price index (PPI) - - has not shown up fully yet at the retail level. That should enable the Fed to cut interest rates by 50 basis points at its next meeting, and later this winter to help stimulate the slowing U.S. economy.
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Reader Comments (Page 1 of 1)
1-16-2008 @ 10:17AM
CARL FISCHER said...
my food bill up $50 per week.
my gas bill up $75 more per month than last year.
my electric bill up $65 more per month than last year.
fill my car up per week up $20 more than last year.
what does this =RECESSION!!!
1-16-2008 @ 12:35PM
schucks said...
Until the election and a new president is in office we will suffer as president Bush could care less. I hope the next president can reverse the damage done by him. Vote for John McCain he has been in a war and knows how to win one he wouldn't have made the mistake sending in to few of troops. We will have a recession now because the fed is more worried about inflation-the dummys could care less about how it hurts the poor & middleclass.