Economic data in the US showed a rise in consumer prices in January, measured by core inflation, the biggest rise in 12 months, reinforcing views that price pressures will accelerate this year. Consumer prices, measured by the Consumer Price Index (CPI), rose by 0.4%. This was the largest increase since September, and came after another 0.1% increase in December.<\/p>\n
The personal consumer price index rose in the last 12 months up to January by 1.7%, after similar gains in December due to the base effects. Excluding volatile food and energy components, the consumer price index rose by 0.3 percent in January, its biggest gain since January 2017.<\/p>\n
The main consumer price index rose by 0.2% in December. Unfavorable base effects also maintained an annual increase in the PCE price index of 1.5% in January. It should be noted here that the core PCE index is the Fed\u2019s preferred inflation gauge. Economists expected the headline PCE price index to rise by 0.3% in January and increase by 1.5% year-on-year.<\/p>\n
Inflation is expected to hit its target this year as the tight labor market strengthens wage growth. The faster economic growth, supported by the $1.5 trillion tax-cutting package, coupled with increased government spending, will see inflation rise.<\/p>\n
On Tuesday, Federal Reserve Chairman Jerome Powell offered an upbeat assessment of the economy, pointing out that the fiscal policy had become more stimulating. The comments prompted traders to raise their bets on four interest rate increases this year, while the Federal Reserve expects to raise interest rates three times in 2018.<\/p>\n
The rise in inflation curbed consumer spending growth in January. Consumer spending, which accounts for more than two-thirds of US economic activity, rose by 0.2 percent. This was the smallest increase since August, following a 0.4% in December. It was also the latest indication that economic growth declined at the beginning of the year after a growth rate of 2.5% in the fourth quarter of last year.<\/p>\n
Industrial production, home sales and commodities capital goods fell in January. But spending is still supported by a strong labor market that Fed officials see as being close to the full labor market. Personal income rose by 0.4% in January, and wages rose by 0.5% after rising by 0.4% in December. The savings rate rose to 3.2% from 2.5% in December. The Commerce Department said that savings in January had been boosted by tax cuts.<\/p>\n","protected":false},"excerpt":{"rendered":"
Economic data in the US showed a rise in consumer prices in January, measured by core inflation, the biggest rise in 12 months, reinforcing views that price pressures will accelerate this year. Consumer prices, measured […]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":425,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[27,50,36,34,24,39],"_links":{"self":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts\/424"}],"collection":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/comments?post=424"}],"version-history":[{"count":1,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts\/424\/revisions"}],"predecessor-version":[{"id":426,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts\/424\/revisions\/426"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/media\/425"}],"wp:attachment":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/media?parent=424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/categories?post=424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/tags?post=424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}