Nation's consumer prices up 0.3 percent last month
| • | Honolulu CPI rises 0.2 percent |
By Martin Crutsinger
Associated Press
WASHINGTON — Consumer prices rose by 0.3 percent in January, the biggest one-month increase in nine months, as gasoline and other energy prices shot skyward, reflecting worries in global oil markets over what a war in Iraq would do to supplies.
The Labor Department said yesterday that the January increase in its Consumer Price Index, the most closely followed inflation gauge, was the biggest since a 0.4 percent advance last April. In November and December, prices had edged up just 0.1 percent.
Virtually all of the price pressure occurred in the energy sector. The costs of a variety of other items from clothing and food to new cars and airline tickets actually fell in January, underscoring that the weak U.S. recovery is making it hard for companies to charge more for their goods.
"With the economy stuck in first gear and demand very limited, inflation remains completely subdued," said Oscar Gonzalez, an economist at John Hancock Financial Services in Boston.
Gonzalez said the CPI report should quiet fears raised by Thursday's report on wholesale prices showing that inflation at this level jumped by a sizable 1.6 percent, an increase that also was led by higher energy costs.
The good news on inflation helped soothe nerves on Wall Street, where the Dow Jones industrial average halted a two-day slide.
Although price pressures at the wholesale level can get passed on to consumers, economists said they believed much of the PPI reading in January reflected statistical quirks and not any threatening buildup in prices outside of energy.
"Going forward, energy prices will be greatly influenced by how any war in Iraq unfolds," said David Wyss, chief economist at Standard & Poor's in New York.
