CPI Increases as Expected

by: Roy Mehta

The CPI rose 0.3% last month with the main catalysts being food and energy, while core-inflation jumped the 0.2%. The figures, which were released by the Labor Department on Wednesday, were in-line with economists' expectations. The core CPI, which excludes food and energy prices, has increased 2.1% in the past year, slightly above the Fed's unofficial comfort area. The data released showed food prices increased 0.5%, and energy prices rose 0.3%. Despite the moderate increase, it seems the Fed will worry more about economic growth, as the recent credit crisis and housing slump continue to threaten the US economy. Fed Chairman Bernanke said in a speech Monday, he expects the slower growth in future quarters will help reduce inflationary pressures.

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