MercoPress, en Español

Montevideo, March 9th 2021 - 07:49 UTC

 

 

US: Fuel cost pushes retail prices but core inflation decreasing

Tuesday, April 17th 2007 - 21:00 UTC
Full article

A jump in fuel prices pushed the United States March retail prices index to its highest in twelve months, 0.6%. However the good news is that core inflation which excludes energy and food costs rose by 0.1%, down from 0.2% in February and 0.3% in January.

According to a release from the Labor Department March was the highest monthly increase since April 2006 with 0.6%. Gasoline prices soared 10.6% in March compared to 0.3% in February, making it the highest jump since September 2005 with 17.4% The accumulated seasonally adjusted index for the first quarter was 4.7% which is almost double the same period last year. Higher energy costs accounted for 41% of the total gain in first-quarter consumer prices pointed out the Labor Department release. Market analysts were considering the impact the latest inflation figures could have in the Federal Reserve and its interest rates policy. The Fed in recent statements said that inflation in the coming months would begin declining and return to the tolerance margin of 1 to 2%. The effect of higher interest rates and energy costs, both of which take money out of a consumer's pocket, has been evident in the US housing market. On Tuesday, the Commerce Department said that housing starts increased 1.518 million in March from 1.506 million in February. Analysts said that while there was an increase last month, the general trend for housing starts was one of decline as demand slows and the US housing market cools. Meantime in Britain the increase in the Consumer Prices Index which is expected to trigger a further rise in UK interest rates pushed the pound in money markets above the 2 US dollars threshold. The Bank of England in a letter to the Chancellor of the Exchequer said it was determined to bring inflation back to its 2% target after having soared to 3.1% in March.

Categories: Energy & Oil, United States.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!