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Gas Lifts Consumer Costs but Not Enough to Alarm Fed
Wall Street Journal ^ | March 15, 2013 | By SARAH PORTLOCK And JEFFREY SPARSHOTT

Posted on 03/15/2013 10:15:16 AM PDT by 1rudeboy

WASHINGTON—A monthly reading of U.S. consumer prices rose the most in nearly four years in February because of higher fuel costs, though a recent drop in gasoline prices suggests temporary inflation pressure that isn't likely to alarm Federal Reserve officials.

The seasonally adjusted index of consumer prices jumped 0.7% last month, the biggest increase since June 2009, the Labor Department said Friday. The gasoline index alone surged 9.1%, accounting for nearly three-fourths of the gain. Overall energy prices climbed 5.4% after declining the previous three months.

Core prices, which exclude the volatile food and energy sectors, increased 0.2%.

The Fed has been closely monitoring inflation as it pumps money into the financial system. The easy-money policies are meant to spur investment and boost employment, though some critics have worried that they could also lead to too-high inflation.

"Despite the sharp rise in headline prices and some modest firming in core consumer-inflation pressures, the overall backdrop for consumer prices remains favorable, providing further breathing room for the Fed to remain accommodative," said Millan Mulraine with TD Securities.

Fed officials project overall inflation to stay between 1.3% and 2% in 2013—well below the 2.5% threshold they have set to begin raising interest rates. The central bank's policy makers next meet March 19-20.

Friday's report said that year-over-year, consumer prices were up 2% and core prices rose 2%, matching the Fed's target for annual inflation.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS:
How can this be? I thought the government does not count energy in its inflation figures.
1 posted on 03/15/2013 10:15:16 AM PDT by 1rudeboy
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To: 1rudeboy

What do they count? I can’t think of anything that hasn’t gone up.


2 posted on 03/15/2013 10:18:04 AM PDT by ilovesarah2012
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To: 1rudeboy

or food...

as long as your don’t use food or energy, everything is fantastic.


3 posted on 03/15/2013 10:36:18 AM PDT by TurboZamboni (Looting the future to bribe the present)
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To: 1rudeboy

Friday’s report said that year-over-year, consumer prices were up 2% and core prices rose 2%, matching the Fed’s target for annual inflation.


Somehow my budget seems to say otherwise. Maybe my “market basket” is defective somehow.


4 posted on 03/15/2013 10:40:10 AM PDT by garbanzo (It's the end of the world as we know it and I feel fine)
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To: 1rudeboy
Gas Lifts Consumer Costs but Not Enough to Alarm Fed

Ben "Inky" Bernanke wouldn't be alarmed if people were burning stacks of million dollar bills to keep warm.

5 posted on 03/15/2013 10:49:05 AM PDT by KarlInOhio (Choose one: the yellow and black flag of the Tea Party or the white flag of the Republican Party.)
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To: TurboZamboni

Yeah. Have automobiles and clothing averaged 2% increases per year? I think not.


6 posted on 03/15/2013 11:42:34 AM PDT by princeofdarkness (The GOP is the present version of 1940 France and it will only get worse.)
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To: 1rudeboy

They’re creating, out of thin air, $85 billion a month, $1 Trillion per year,

“UNTIL IT WORKS”.


7 posted on 03/15/2013 11:46:53 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: 1rudeboy
What is interesting in the report, is that new car prices fell slightly while used car price rose slightly. From what I've read and seen, there is a glut of new cars sitting on lots. Even with low subprime rates for new cars and zero down for people with better credit, there is an upward pressure on used car prices..
8 posted on 03/15/2013 4:37:01 PM PDT by EVO X
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To: MrB

The US is like that family in 2007 riding a wave of false prosperity based on maxxed out credit cards and helocs on a house with negative equity.

Instead of two leased luxury SUVs and a McMansion, we’ve got election-friendly entitlements.


9 posted on 03/15/2013 4:44:08 PM PDT by nascarnation (Baraq's economic policy: trickle up poverty)
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To: MrB

Exactly how does the fed “put” the $85 billion into the market?


10 posted on 03/15/2013 8:38:29 PM PDT by Terry Mross (How long before America is gone?)
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To: 1rudeboy

Of course it doesn’t. Why should it when they can just make legislation throwing it on someone else’s shoulders to pay for?


11 posted on 03/16/2013 11:56:10 AM PDT by RWB Patriot ("My ability is a value that must be purchased and I don't recognize anyone's need as a claim on me.")
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To: 1rudeboy

Just went and filled up on Thursday. The price per gallon went down. I was a little taken back by it.

They have been steadily rising over the past month. I’m sure once summer comes around, gas prices will skyrocket.


12 posted on 03/17/2013 9:50:49 AM PDT by NoGrayZone (For evil to triumph it is only necessary for good men to do nothing.)
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