US consumer prices up 0.4% in Dec
JOB OPENINGS DOWN IN MOST INDUSTRIES Layoffs spike
WASHINGTON, Jan 13, (AP): U.S. consumer prices rose 0.4% in December, led by a sharp rise in gasoline prices.
Last month’s increase, the largest in four months, followed a 0.2% rise in November and no change at all in October, according to Labor Department numbers released Wednesday.
Inflation for all of 2020 rose a modest 1.4%, well below the Federal Reserve’s 2% target. Analysts believe inflation will remain subdued with the U.S. economy still unable to break out of a pandemic-induced downturn.
For December, energy prices rose 4% with gasoline prices surging 8.4%. Even with that big jump, gasoline prices are 15.2% below where they were a year ago, when people were still commuting to work. Food costs rose 0.4% in December and are 3.9% higher than a year ago.
Core inflation, excluding volatile food and energy, rose a slight 0.1% last month, and just 1.6% over the past 12 months.
Inflation has been dormant over the past decade, a development that is allowing the Federal Reserve to keep interest rates at ultra-low levels during a surge in Covid-19 cases that has forced more business shutdowns at a time when millions are out of work.
Kathy Bostjancic, chief U.S. financial economist, said the benign inflation performance will likely mean that the Fed does not start raising interest rates until 2024.
“The Fed’s policy objectives signal that monetary policy will remain very accommodative for a considerable time,” Bostjanci said.
Meanwhile, layoffs spiked in November compared with the previous month and the number of job openings slipped, signaling that the job market has stalled as the resurgent coronavirus has brought about another wave shutdowns of restaurants and bars and hobbled consumer spending.
While the layoffs were concentrated among restaurants, bars and hotels, the slowdown in job postings was widespread across most industries, showing a reluctance by businesses to hire more people amid a pandemic fueled recession.
The number of open jobs at the end of November slipped 1.6% to 6.5 million, the Labor Department said Tuesday, its first drop since August. Layoffs, however, soared 17.6% to 1.9 million, driven mostly by job cuts at restaurants, bars and hotels, which more than doubled.
The economy is likely to grow at a healthier pace later this year, economists forecast, as vaccines are more widely distributed and recent government stimulus provides more money for Americans to spend. The faster growth should boost hiring, but most employers for now appear to be in wait-and-see mode.
On Friday, the Labor Department said employers cut 140,000 jobs in December, the first time the nation has shed jobs since April when U.S. infections began to surge. The unemployment rate was stuck at a still-high 6.7%, the first time it hasn’t declined since April. Jobs lost according to that report were also highly concentrated in fields like educational services and film production, as well as already suffering restaurants and hotels.
Tuesday’s report, known as the Job Openings and Labor Turnover Survey, or JOLTS, adds more details about hiring and firing by businesses and government agencies.