U.S. prices rise faster than expected
Last Updated Fri, 17 Feb 2006 09:40:35 EST
CBC News
Rising prices for electricity, food and autos pushed U.S. producer prices up 0.3 per cent in January, while the cost of other goods and services climbed 0.4 per cent, twice as high as expected.
The U.S. Labour Department report also indicates wholesale inflation is rising faster than expected, stirring fears that the Federal Reserve will push interest rates up at its next meeting in March.
Wholesale prices rose more than expected in January
The market had expected a rise of 0.2 per cent in January, a far cry from the 0.6 percentage point gain in December.
The report suggests underlying inflation pressures were somewhat higher last month than financial markets had expected.
The Federal Reserve has raised short-term interest rates 14 times since June 2004 in a bid to head off the pressure of rising prices, and another rate hike is anticipated in March.
The producer price index was up 5.7 per cent from January 2005, driven mostly by a 25 per cent surge in the price of finished energy goods. However, core prices have increased just 1.5 per cent in the last 12 months, suggesting energy price increases are not passing through to other goods.
Energy prices were flat in January. The cost of residential electricity soared three per cent, the largest monthly gain on record, while the price of residential natural gas climbed 0.8 per cent. Those increases were offset by a 3.5 per cent drop in the price of gasoline and a 6.8 per cent decline in liquefied petroleum gas.
FROM FEB. 16, 2006: Oil prices rise above $58 US a barrel following previous day's steep drop
Food costs rose 0.2 per cent after a hefty 0.8 per cent gain in December.
The Labour Department said the price of passenger cars climbed 1.1 per cent, while the price of light trucks was up 0.7 per cent and civilian aircraft prices were 0.7 per cent higher. |
