U.S. Economy: Consumer Prices Rise More Than Forecast
The consumer-price index advanced 0.4 percent for a second month, led by the biggest increase in food costs in more than two years, according to figures today from the Labor Department in Washington. Other reports showed manufacturing is bolstering the expansion, and consumer confidence is being buffeted by rising household expenses.
Americans are paying more for air travel and clothing as growing economies in Asia and Latin America boost demand for commodities like oil and cotton. Another report today showing more people than projected filed claims for jobless benefits last week indicates workers don’t have the power to seek bigger pay increases, evidence inflation is unlikely to flare.
“You’re seeing some pass-through of commodity costs in a few areas like airline fares, tires and clothing, but it’s still pretty muted,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “For an upward spiral in CPI, we need to see wage inflation start to accelerate, and that’s not in the cards.”
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