- U.S. Inflation Surges to 4-year High in January
The cost of living in the U.S. surged in January by the most since February 2013, boosted by the increase in costs of gasoline and goods and services.
The consumer price index which measures inflation rate rose 0.6 percent in January from 0.3 percent recorded in December, according to the Labor Department report released on Wednesday. This further confirmed that inflation is gathering momentum as stated by the Federal Reserve Chair Janet Yellen on Tuesday.
According to Federal Reserve Chair, if inflation picks up and the labor market remains consistent with the FOMC target, more interest rate increase will be appropriate to avoid rapid rate hike that could impede current progress or even lead to economic recession.
“CPI inflation has been steady in recent months amid rising energy prices,” Sam Bullard, senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said in a note before the report. “After the past couple years, the transitory nature of the dip in inflation due to the decline in energy prices has come to fruition.”
Critically looking into the figures, half of the increase comes from the surge in the cost of gasoline which rose by 7.8 percent after OPEC cut output.
The Fed Chair, had said, the committee will evaluate weather inflation and employment are evolving in line with Fed expectations, “in which case a further adjustment of the federal funds rate would likely be appropriate,” Yellen told the Senate Banking Committee in prepared remarks Tuesday.
The retails sales rose 0.4 percent in January, following a 1 percent increDecemberecember.