Key U.S. inflation measure at 4-year high: Knowledge Driven Revolution

A key measure of consumer inflation in the U.S. rose to a near four-year high in June, increasing pressure on the U.S. Federal Reserve to boost interest rates again.

Core consumer inflation, as measured by the personal consumption expenditure price index, rose by 0.2 per cent last month, the U.S. Commerce Department reported Tuesday.

That puts the 12-month core consumer inflation rate at 2.4 per cent — a reading matched in September 2002 and not surpassed since the 2.5 per cent recorded in April 1995.

The core reading, which excludes volatile food and energy prices, exceeds the one to two per cent range the Federal Reserve likes to see. That led to some speculation that the Fed would continue its campaign of interest rate hikes.

The Fed has already raised its key lending rate 17 times since 2004 to 5.25 per cent.

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Blue chips down

U.S. blue chips were down in Tuesday trading on heightened inflation fears, with the Dow Jones industrial average off 59.95 points to close at 11,125.73.

The next interest rate policy meeting for the U.S. central bank takes place next week.

The new government data also showed that consumer spending advanced by a tepid 0.2 per cent in June, after adjusting for inflation. The savings rate improved slightly to negative 1.5 per cent. That's the 15th consecutive month of negative savings, meaning that American consumers are continuing to spend more than they earn.

"While we continue to believe that the odds are slightly tilted towards a pause at the next [Federal Reserve] meeting, especially in light of [governor Ben] Bernanke's view that slower growth will restrain inflation pressures down the road, this one is becoming a very, very tough call," TD Bank chief strategist Marc Lévesque said in a commentary.

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HOME V for Vendetta - R for Reality Canadian Bird Flu Pandemic Looming ? Shill of the Week: Stephan Harper Aspartame: The Sweetest Killer Chicken Little Terrorist of the Week: Creating Fake Terrorists Shill of the Week: Paul Martin The Number 1 Reason YOU became a Slave	Key U.S. inflation measure at 4-year high CBC News August 04, 2006 A key measure of consumer inflation in the U.S. rose to a near four-year high in June, increasing pressure on the U.S. Federal Reserve to boost interest rates again. Core consumer inflation, as measured by the personal consumption expenditure price index, rose by 0.2 per cent last month, the U.S. Commerce Department reported Tuesday. That puts the 12-month core consumer inflation rate at 2.4 per cent — a reading matched in September 2002 and not surpassed since the 2.5 per cent recorded in April 1995. The core reading, which excludes volatile food and energy prices, exceeds the one to two per cent range the Federal Reserve likes to see. That led to some speculation that the Fed would continue its campaign of interest rate hikes. The Fed has already raised its key lending rate 17 times since 2004 to 5.25 per cent. Read the full article here Article Continued... Blue chips down U.S. blue chips were down in Tuesday trading on heightened inflation fears, with the Dow Jones industrial average off 59.95 points to close at 11,125.73. The next interest rate policy meeting for the U.S. central bank takes place next week. The new government data also showed that consumer spending advanced by a tepid 0.2 per cent in June, after adjusting for inflation. The savings rate improved slightly to negative 1.5 per cent. That's the 15th consecutive month of negative savings, meaning that American consumers are continuing to spend more than they earn. "While we continue to believe that the odds are slightly tilted towards a pause at the next [Federal Reserve] meeting, especially in light of [governor Ben] Bernanke's view that slower growth will restrain inflation pressures down the road, this one is becoming a very, very tough call," TD Bank chief strategist Marc Lévesque said in a commentary. Broken Link? If the link to the original article is broken or has been altered you can view the article by clicking the "Expand/Collapse" button below. About KDR \| \| Home \| \| Weekly Features Archive	Weekly Features Archive
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