Economy: Price rises spark inflation fears
“U.S. consumer prices rose considerably more than expected in January, fueling fears that inflation is about to turn dangerously higher,” said Jeff Cox in CNBC.com. The Consumer Price Index, which measures how quickly prices go up, rose 0.5 percent last month, surging past the 0.3 percent increase predicted by analysts. “The report indicated that price pressures were ‘broad-based,’ with rises in gasoline, shelter, clothing, medical care, and food.” The annual inflation rate rose to 2.1 percent, which marginally surpasses the Federal Reserve’s 2 percent goal. “Investors were watching the report closely after fears of surging inflation helped send the stock market lower” last week.
The surprising jump in consumer prices is “another sign that wages are rising for workers,” said Patrick Gillespie in CNN.com. In the grand scheme of things, that’s a “welcome sign that reflects the health of the economy.” Both wages and prices have remained defiantly stagnant for years in the wake of the Great Recession, “even as unemployment has fallen and millions of jobs have been created.” But what’s good news for Main Street isn’t as rosy for Wall Street. “For investors, faster inflation makes it more likely that the Federal Reserve will raise interest rates more quickly this year.” ■