Rise in core consumer prices stokes inflation fears

Published: Wednesday, February 14, 2018 @ 8:37 AM
Updated: Wednesday, February 14, 2018 @ 8:36 AM


            FILE- In this Nov. 24, 2017, file photo, a shopper looks over clothing at a J.C. Penney store in Seattle. On Wednesday, Feb. 14, 2018, the Labor Department reports on U.S. consumer prices for January. (AP Photo/Elaine Thompson, File)
FILE- In this Nov. 24, 2017, file photo, a shopper looks over clothing at a J.C. Penney store in Seattle. On Wednesday, Feb. 14, 2018, the Labor Department reports on U.S. consumer prices for January. (AP Photo/Elaine Thompson, File)

U.S. consumer prices, excluding the volatile food and energy categories, rose 0.3 percent last month. That was the biggest climb in a year and has intensified inflation fears in financial markets.

Overall consumer prices rose 0.5 percent in January, the most in four months, the Labor Department said Wednesday. Inflation rose 2.1 percent from a year earlier and core prices increased 1.8 percent. The increases were led by much higher clothing costs and more expensive car insurance.

Both measures show that inflation is mostly contained, but the increase in core prices will likely make investors nervous. Analysts are hyper-focused on whether faster price increases may cause the Federal Reserve to raise short-term interest rates faster than expected. Higher interest rates make it more expensive for consumers and businesses to borrow and spend and could slow growth.

"We think the increase in core inflation is a sign of things to come over the rest of the year," said Michael Pearce, U.S. economist at Capital Economics.

Pearce expects core inflation will reach nearly 2.5 percent in the spring and keep rising. Other economists forecast that core prices won't reach that level until the end of the year, if at all.

Investors dumped stocks and bonds in the wake of the report, but stock indexes later rebounded. The Dow Jones industrial average ticked up 10 points by mid-day. The yield on the 10-year Treasury, a benchmark for mortgage rates, rose to 2.88 percent.

Inflation was largely dormant for most of the past decade, but inflation fears — at least in the financial markets — have roared back this year. It's a sharp shift from last year when consumer price growth slowed, even as the economy grew and the unemployment rate fell. These are rends that typically push inflation higher.

Fears of higher prices worsened earlier this month after a government report in early February showing wages grew in the past year at the fastest pace in eight years. That sparked a market sell-off that sent stock indexes down 10 percent before rebounding this week.

Clothing costs jumped 1.7 percent in January after three months of declines. That was biggest monthly gain since 1990. Auto insurance prices rose 1.3 percent, the most since 2001.

Gasoline prices rose 5.7 percent last month, pushing up the headline index. Gas prices have risen a bit more this month: On Wednesday, the nationwide average gas price was $2.56 a gallon, up three cents from a month earlier.

Despite the market's jitters, inflation isn't yet much of a threat to consumers. The 1.8 percent increase in core prices is still below the Fed's 2 percent target. The Fed follows a different inflation gauge, which hasn't consistently topped 2 percent for six years.

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Glassdoor names 50 most beloved CEOs in America

Published: Wednesday, June 08, 2016 @ 5:41 PM
Updated: Wednesday, June 08, 2016 @ 5:01 PM

H-E-B's Charles C. Butt made the list of America's 50 most beloved CEOs.
H-E-B's Charles C. Butt made the list of America's 50 most beloved CEOs.

The chiefs of Facebook, Google, Apple and Texas' beloved H-E-B all made the ranks on job site Glassdoor's list of top-rated CEOs of a large company in the U.S.

Glassdoor determined the 50 rankings by collecting anonymous employee reviews. Beating out well-known names like Facebook's Mark Zuckerberg, is Bob Bechek at No. 1. Bechek is the worldwide managing director of Bain & Company, a management consultant firm, and received a 99 percent approval rating from employees surveyed. 

Zuckerberg did make top 10 though, along with LinkedIn's Jeff Weiner, Apple's Tim Cook and Google's Sundar Pichai. A bit further down the list at No. 19 is H-E-B's CEO Charles C. Butt, who received a 95 percent approval rating. 

Satisfied employees gave reviews like "H-E-B has always been hreat with allowing Partners to have a flexible schedule" while negative reviews said the company is "very demanding" and "has you work full-time hours while keeping you on part-time status."

To see who else made the list and what employees had to say about each company, you can go here. 

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