Higher US gas prices spark mod­est March in­fla­tion: La­bor Depart­ment

The China Post - - FRONT PAGE - BY JOSH BOAK

Ris­ing gas prices in March led to a slight in­crease in in­fla­tion, a sign that some of the broader eco­nomic im­pact from cheaper oil is fad­ing.

The con­sumer price in­dex rose 0.2 per­cent in March, the La­bor Depart­ment said Fri­day. In­fla­tion moved at that same pace in Fe­bru­ary, which ended three straight monthly de­clines caused largely by fall­ing oil and gaso­line prices.

Prices at the pump rose 3.9 per­cent in March, con­tribut­ing along with other sec­tors to a small dose of in­fla­tion. Still, gas re­mains rel­a­tively cheap, fall­ing roughly 33 per­cent over the past year to an av­er­age price of US$2.41 a gal­lon, ac­cord­ing to AAA’s Daily Fuel Gauge. Pri­mar­ily be­cause of less ex­pen­sive gas, con­sumer prices dipped 0.1 per­cent in the 12 months ended in March, mean­ing that more Amer­i­cans are able to con­serve their spend­ing.

Out­side food and en­ergy, core prices also rose 0.2 per­cent in March. The cost of clothes, hous­ing, cars, and med­i­cal care in­creased, while food and air­fare de­creased. Core prices have risen 1.8 per­cent in the past year.

Sev­eral fac­tors out­side of gaso­line sug­gest that in­fla­tion will likely con­tinue to be sub­dued. The stronger dollar has slashed the cost of im­ported elec­tron­ics, cloth­ing and other items. The dollar has climbed in value against the euro and yen be­cause the U.S. econ­omy has ex­pe­ri­enced stronger growth than much of Europe and Ja­pan. At the same time, av­er­age hourly wages have risen at an an­nual rate of just 2 per­cent, too low to cause a surge in con­sumer de­mand that would en­able re­tail­ers to hike their prices.

If gas prices hold steady, the an­nual in­fla­tion rate could begin to rise later this year. Econ­o­mists will be care­fully mon­i­tor­ing whether in­fla­tion reaches the Fed­eral Re­serve’s tar­get of 2 per­cent, a level deemed man­age­able enough to en­cour­age con­sumer ac­tiv­ity while keep­ing prices rel­a­tively sta­ble and pro­tect­ing against de­fla­tion.

Af­ter a two-day meet­ing last month, Fed pol­i­cy­mak­ers said in a state­ment that it might be ap­pro­pri­ate to raise rates af­ter “fur­ther im­prove­ment in the la­bor mar­ket” and when they’re “rea­son­ably con­fi­dent that in­fla­tion will move back to its 2 per­cent ob­jec­tive over the medium term.”

US stocks join Euro­pean dive

on Greece fears

US stocks dived in early trade Fri­day, fol­low­ing a sell-off in Euro­pean eq­ui­ties as wor­ries about Greece’s talks with cred­i­tors hung over mar­kets.

About 30 min­utes into trade, the Dow Jones Industrial Av­er­age was at 17,876.48, down 228.29 points (1.27 per­cent).

The broad-based S&P 500 fell 19.01 (0.90 per­cent) to 2,085.98, while the tech-rich Nas­daq Com­pos­ite In­dex tum­bled 59.70 (1.19 per­cent) to 4,970.70.

Ne­go­ti­a­tions be­tween Greece and in­ter­na­tional cred­i­tors will re­sume Satur­day in Brussels on re­form re­quire­ments Athens needs to meet to re­ceive its last pay­ment of its bailout funds, the Euro­pean Union said.

AP

From left: Hesse state Gover­nor Volker Bouffier , Ger­man Chan­cel­lor An­gela Merkel, Ger­man Par­lia­ment Pres­i­dent Nor­bert Lam­mert, , the part­ner of Ger­man pres­i­dent, Daniela Schadt, Ger­man Pres­i­dent Joachim Gauck, and North Rhine-West­phalia Gover­nor Han­nelore Kraft at­tend a mourn­ing cer­e­mony at the Cologne Cathe­dral in Cologne, Ger­many Fri­day, April 17. A mourn­ing cer­e­mony was be­ing held in the cathe­dral in mem­ory of the 150 vic­tims of the Ger­man­wings plane crash last month in the French Alps.

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