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To: im a survivor who wrote (62298)	1/14/2000 1:51:00 PM
From: T L Comiskey	Read Replies (1) \| Respond to of 152472

Consumer Prices Up for ?99 Core Inflation Rate Lowest Since 1965; Industrial Production Meets Expectations For December, the Consumer Price Index, the most closely watched inflation gauge, was up 0.2 percent, less than many analysts were forecasting. (ABCNEWS.com) By Jeannine Aversa The Associated Press W A S H I N G T O N, Jan. 14. ? A big jump in energy prices helped push consumer inflation up 2.7 percent in 1999, the biggest increase in three years. But prices were relatively contained in most other areas, posting the best performance since the mid-1960s. Outside of energy and food, the ?core? rate of inflation rose just 1.9 percent last year, the smallest annual increase since a 1.5 percent rise in 1965, the Labor Department said today. Last?s year core rate was even better than a 2.4 percent increase in 1998 and suggests that inflation remains under control. For December, the Consumer Price Index, the most closely watched inflation gauge, was up 0.2 percent, less than many analysts were forecasting. The December advance came from a leap in gasoline and other energy prices. Energy Costs Surged The 2.7 percent advance in last year?s consumer prices was the largest annual gain since a 3.3 percent rise in 1996. It reflected a 13.4 percent increase in energy costs, which had fallen sharply in 1998 as the Asian financial crisis severely dampened global demand. Production limits by oil-producing nations and increase demand from recovering economies in Asia explained the surge in energy costs. The Federal Reserve bumped up interest rates three times last year to slow the sizzling economy and keep inflation under control. Most economists believe the central bank will boost rates again at its Feb. 1-2 meeting, given continuing strong economic growth. On Thursday, Federal Reserve Chairman Alan Greenspan expressed new worries that the soaring stock market could lead to an overheated U.S. economy. Those new concerns made it all but certain the Fed will raise rates for a fourth time at the February meeting, private economists said. Some economists predict the central bank also will bump up rates in March. In Tokyo, Japan?s key stock index ? the Nikkei Stock Average ? closed higher today after recovering from a brief selloff prompted by Greenspan?s remarks. In a second report, the nation?s industrial output rose 0.4 percent in December, right on target with many analysts? expectations, indicating that the economy headed into 2000 on solid footing. Operating capacity was 81.3 percent, well below levels associated with a pickup in inflation. Modest Increases in December The advance in December?s overall consumer prices reflected a 1.4 percent rise in energy prices, boosting the total increase for the year to 13.4 percent, the largest annual gain since an 18.1 percent increase in 1990. Gasoline prices rose 4.1 percent last month. That pushed the total increase for 1999 to 30.1 percent, the highest since a 36.8 percent increase in 1991. Food prices, meanwhile, rose a tiny 0.1 percent in December and 1.9 percent for all of last year. Rising prices for beef, pork and vegetables in December offset falling prices for poultry and dairy products. Outside energy and food, the ?core? rate of inflation rose a scant 0.1 percent in December, reflecting a smaller increase in shelter costs. This was lower than most analysts expected. The small, 1.9 percent advance in the core inflation rate for all of 1999 stemmed from moderating prices for shelter, tobacco and other smoking products. Shelter costs rose just 0.2 percent in December and 2.5 percent in 1999, the smallest annual increase since a 2.4 percent gain in 1982.