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US inflation may stall rate cuts | |
(21 minutes later) | |
US consumer price growth rose by 0.4% in January, official figures show, more than many analysts had forecast. | US consumer price growth rose by 0.4% in January, official figures show, more than many analysts had forecast. |
According to the US Labor Department, the main drivers of price growth were food and healthcare costs. | According to the US Labor Department, the main drivers of price growth were food and healthcare costs. |
The figures come as the US Federal Reserve has been slashing interest rates in an effort to kick-start slowing economic growth. | |
Analysts said that inflation concerns may hamper the Fed when it comes to cutting rates again in the future. | Analysts said that inflation concerns may hamper the Fed when it comes to cutting rates again in the future. |
Separate data showed that the US housing market was still experiencing problems, with construction indicators hovering near their lowest levels since 1991. | |
According to the Commerce Department, applications for building permits, fell by 3% to 1.048 million units. | |
Analysts said that disappointing figure offset an increase in housing starts which rose by 0.8% in January. | |
An increase of unsold homes and mounting mortgage defaults probably will weigh on the housing market and the wider economy, analysts said. | |
"Housing continues to be an area that will act as a drag on the economy going forward," said Kevin Flanagan of Morgan Stanley. |