Inflation Rate Worst in 17 Years
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Breaking News from MoneyNews.com Inflation Rate Worst in 17 Years Consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006, with consumers especially feeling the pain when they filled up their gas tanks or shopped for groceries. Prices for both energy and food shot up by the largest amount since 1990. Story continues below . . .
For December, the Consumer Price Index rose by 0.3 percent, down from 0.8 percent in November, as food costs were flat for the month and energy prices rose by 0.9 percent after an even bigger 5.7 percent jump in November. Outside of food and energy, inflation rose a more moderate 0.2 percent in December. This measure of core inflation rose by 2.4 percent for all of 2007, down slightly from a 2.6 percent increase in 2006. The Federal Reserve is closely watching to see whether the jump in food and energy becomes more widespread and starts pushing core inflation higher. Analysts said that with core prices generally remaining well-behaved, it will give the central bank the leeway to cut interest rates further to battle a serious economic slowdown triggered by a steep slump in housing and a spreading credit crisis. The expectation is that the Fed will cut a key rate by a half-point when officials meet at the end of this week. Federal Reserve Chairman Ben Bernanke raised hopes for further rate cuts in a speech last week when he said that economic risks had grown significantly in recent weeks. © 2008 Associated Press. Editor's Notes: |