Consumer Prices in U.S. Climb More Than ForecastBy - Feb 17, 2011
The cost of living in the U.S. climbed more than forecast in January, led by higher prices for food and fuel that may be starting to filter through to other goods and services.
The consumer-price index increased 0.4 percent for a second month, exceeding the 0.3 percent median estimate of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The so-called core rate, which excludes volatile food and fuel costs, rose 0.2 percent, the biggest gain since October 2009.
Growing economies in Asia and Latin America are boosting global demand for oil and other commodities, raising costs for American factories. Accelerating growth is prompting some companies to carry out beginning-of-year price increases even as consumers remain constrained by unemployment at 9 percent.
“You’re going to see more companies that attempt to pass through” higher costs, said Tom Porcelli, chief U.S. economist at RBC Capital Markets Corp. in New York, who correctly forecast the gain in core prices. “How successful they are depends on the economic backdrop. We’re looking at a slightly firmer inflation backdrop.”
The projected gain in consumer prices was based on the median of 79 economists in a Bloomberg survey. Estimates ranged from increases of 0.2 percent to 0.5 percent.
More ClaimsAnother Labor Department report showed more Americans than projected filed first-time claims for unemployment insurance last week, a sign the improvement in the labor market will take time to develop.
Applications for jobless benefits increased by 25,000 to 410,000 in the week ended Feb. 12, exceeding the 400,000 median forecast of economists surveyed by Bloomberg. The total number of people receiving unemployment insurance was little changed, while those collecting extended payments decreased.
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