Prices take small uptick

Boston Herald - - BIZ SMART -

WASH­ING­TON — U.S. con­sumer prices rose mod­estly last month, weighed down by fall­ing gaso­line prices.

The La­bor De­part­ment said Thurs­day that its con­sumer price in­dex blipped up 0.1% in Jan­uary af­ter ris­ing 0.2% in De­cem­ber. Over the past year, con­sumer in­fla­tion is up 2.5%, big­gest gain since Oc­to­ber 2018.

Ex­clud­ing volatile food and en­ergy prices, so-called core con­sumer in­fla­tion rose 0.2% in Jan­uary and 2.3% over the past year. Gaso­line prices dropped 1.6% in Jan­uary af­ter surg­ing 3.1% in De­cem­ber. They are up 12.8% over the past year.

Con­sumer in­fla­tion is run­ning close to the Fed­eral Re­serve’s 2% an­nual tar­get.

The Fed last year cut its bench­mark in­ter­est rate three times to the cur­rent his­tor­i­cally low range of 1.5% to 1.75%. The cuts were partly meant to pro­tect a record-break­ing eco­nomic ex­pan­sion from the fallout from Pres­i­dent Don­ald Trump’s trade war with China.

The cen­tral bank has called the cur­rent rates “ap­pro­pri­ate to sup­port sus­tained ex­pan­sion of eco­nomic ac­tiv­ity” and a strong la­bor mar­ket.

Work­ers’ in­fla­tion-ad­justed hourly earn­ings rose 0.1% in Jan­uary af­ter fall­ing 0.1% in De­cem­ber. Their real hourly earn­ings are up 0.6% over the past year. But be­cause they worked fewer hours, their weekly in­fla­tion-ad­justed earn­ings showed “es­sen­tially no change’ over the past year, the La­bor De­part­ment said.

Food prices posted an an­nual in­crease of 1.8% on a 3.1% jump in restau­rant prices. New car prices were up 0.1% over the past year; used car prices dropped 2%. Med­i­cal care prices rose 5.1% from Jan­uary 2019.

AP FILE

BRAK­ING AC­TION: Gaso­line prices have tem­pered con­sumer prices. While gas prices de­clined last month, over­all con­sumer prices rose slightly.

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