Consumer prices rose a modest 0.1% in January as falling energy prices helped offset other price gains, the Labor Department said Wednesday. But the core rate, which excludes volatile food and energy costs, rose 0.2%. A strong 1.1% decline in energy prices in Jan., on the back of Dec. 1.3% drop in energy costs, kept inflation fears checked last month, the report showed. Falling gasoline prices also drove down transportation costs during Jan. However, gains in medical care, clothing and food costs contributed to the slim increase in inflation. Consumer price inflation was unchanged in December.
Federal Reserve Chairman Alan Greenspan said during testimony to Congress last Wednesday that inflation has largely been kept in check and that core inflation "has remained low." The latest inflation numbers are likely to soothe investors' nerves ahead of the release later Wednesday of the minutes from the last Fed interest rate meeting in early Feb. Wall Street will pour over the minutes, partly to seek-out any comments on inflation. Several Fed members had previously voiced concern about inflationary pressures at a prior meeting in mid-December.
Copyright Agence France-Presse 2005.