Securities Firm Says Inflation Indicator Misleading

By John S. McClenahen The Leading Indicator of Inflation compiled by UBS Warburg LLC, New York, rose 0.6% in January, its first increase in 22 months. However, the securities firm insists this doesn't signal higher consumer prices in 2002. "Increases in the Leading Inflation Index typically work with around a one-year lead time relative to consumer price inflation," explains Maury Harris, UBS Warburg's chief U.S. economist. Indeed, he's expecting so-called core inflation as measured by the U.S. Labor Department's Consumer Price Index (CPI) to decline to 2% this year after running 2.7% in 2001. For 2003, Harris anticipates a modest increase in the core CPI rate to 2.5%. The core inflation rate excludes price changes for food and energy.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish