U.S. consumer prices jumped 0.7% in January on a steep rise in energy costs, while the "core" index of inflation, excluding food and energy, rose 0.2%, the government said Feb. 22.
The headline reading for the consumer price index (CPI) was stronger than the 0.5% rise expected on Wall Street. But the core rate, seen by many experts as a more reliable indicator of trends, was in line with forecasts. Over the past year, the CPI is up 4%, while the core rate is up 2.1%.
After two months of declines, energy prices rose 5.0% in January. Gasoline prices increased 6.4% and electricity rose a record 5.5%.
With the CPI up 0.7%, real or inflation-adjusted weekly earnings fell 0.2% in January. In the past year, average weekly earnings have risen 3.6%, but prices have increased 4.0%, more than eating up the average pay raise.
Copyright Agence France-Presse, 2006