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US inflation picks up in January | US inflation picks up in January |
(20 minutes later) | |
US consumer prices climbed in January, the first rise since July, after energy prices picked up. | US consumer prices climbed in January, the first rise since July, after energy prices picked up. |
The consumer price index rose 0.3% from a month earlier after dropping 0.8% in December, the US Labor Department said. | The consumer price index rose 0.3% from a month earlier after dropping 0.8% in December, the US Labor Department said. |
The rise in the cost of living was expected, but analysts said that price rises were unlikely to accelerate given the depth of the recession. | The rise in the cost of living was expected, but analysts said that price rises were unlikely to accelerate given the depth of the recession. |
Consumer prices were unchanged over the past 12 months, the weakest reading since 1955. | Consumer prices were unchanged over the past 12 months, the weakest reading since 1955. |
Some analysts had been worried about the US entering a period of prolonged deflation, which can make a recession even worse. | |
Continued falling prices hit company profits hard as consumers put off purchases. | |
"I guess if anything, it's good news that it ticked up, not that we love inflation," said Terry Morris, senior equity manager at National Penn Investors Trust Company. | |
"I think it's better that it ticked up and that we're pointing away from deflation." | |
However, most analysts see little risk of a surge in prices. Annual inflation is now at zero compared with 5% just six months ago. | |
"We're not about to see core inflation trending higher. There is just too much weakness on the demand side," said Carl Lantz, a strategist at Credit Suisse in New York. | |
Energy prices rose 1.7% in January, driven mostly by petrol prices, but they are down 20.4% from January 2008. |
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