U.S. Consumer Prices Rose 0.4%

Food, energy costs helped push prices up

U.S. consumer prices rose a slightly stronger-than-expected 0.4% in January, a government survey showed Feb. 20. Most economists had expected headline inflation to rise 0.3% after the consumer price index (CPI) increased 0.4% in December.

The core CPI index, which strips out often-volatile food and energy costs, increased 0.3% last month, the Labor Department said in a monthly report.The gain in the core reading was the strongest since June 2003.

The government snapshot showed that housing and medical costs stoked the core CPI reading higher in January while buoyant food and energy costs lifted headline consumer prices.

The Federal Reserve is keeping a close watch on inflationary pressures as sharp price spikes could threaten its rate-cutting campaign, which it launched in September in the face of a lingering housing market slump and a related credit crunch. In the 12 months to January, headline consumer inflation rose 4.3% while the core CPI increased 2.5%.

Copyright Agence France-Presse, 2008

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