U.S. Consumer Prices Higher for Second Month

March 18, 2016

Based on the report released by the Labor Department of the United States, the Consumer Price Index jumped by  2.3  percent in the 12 months through February, an increase of 0.3 percent compared to the 2.2 percent in January.

One of the factors that drove the uptrend of the CPI is the positive data from the rents and medical costs, setting aside the volatile food and energy components.

The largest gain of the core of the CPI increased by 2.3 percent in May 2012. The CPI is the gauge used by the Department  of Labor to measure the weighted average of prices of a basket of consumer goods including transportation, food and medical care.

On a report disclosed by the Commerce Department , the housing rate moved higher as the data of the single-family building increased by 5.2 percent to 1.18 million homes in the previous month.

Medical care costs increased by 0.5 percent, posting the same trend in January.Moreover, the cost of hospital services climbed as well  by 0.5 percent as the prescription drug prices climbed by 0.9 percent.

In addition to, the price for the new motor vehicles together with the used cars and trucks surged. The apparel’s prices hit the biggest increase of 1.6 percent, the largest jump it had for the last seven years.

The wholesale prices slumped by 0.2 percent the  previous month, likewise, the energy costs slipped  by 6 percent.

Prior to the report of the Federal Reserve Meeting Outcome (FOMC), a prominent economist explained that there is absolutely no denying that there are inflationary  pressures. He added that the Federal Reserve can no longer be dismissive on inflation and they are going to have to raise their inflation forecasts.

On the release  of the most awaited Fed meeting report, the policymakers said that they may permit interest rate hike moderately this year as the U.S. may deal with the unstable global economy and strong job gains. Last Wednesday, global equities surged as the central bank announced that it might increase the interest rate twice in 2016.

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