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Monthly inflation up

Saturday, March 03, 2018

WASHINGTON - US consumer prices increased in January, with a gauge of underlying inflation posting its largest gain in 12 months, bolstering views that price pressures will accelerate this year.

Those expectations were underscored by other data on Thursday showing the number of Americans filing for unemployment benefits fell last week to a 48-year low as the labor market tightens. Another a survey showed prices paid by manufacturers for raw materials hit a more than six-year high in February.

The combination of rising inflation and a robust labour market could force the Federal Reserve to raise interest rates a bit more aggressively this year than currently anticipated as it worries about the economy overheating. The US central bank has forecast three rate hikes in 2018. The first rate increase is expected later this month.

"The Fed wanted to see more inflation and it looks like it is getting it," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

"I am down for four (rate hikes) because the acceleration in inflation is not likely to fade anytime soon."

The Commerce Department said consumer prices as measured by the personal consumption expenditures (PCE) price index rose 0.4 per cent. That was the biggest increase since September and followed a 0.1 per cent gain in December. The annual increase was, however, unchanged at 1.7 per cent in January because of unfavourable base effects.

Excluding the volatile food and energy components, the PCE price index advanced 0.3 per cent in January — the largest gain since January 2017. The so-called core PCE price index rose 0.2 per cent in December. Base effects also kept the annual increase in the core PCE price index unchanged at 1.5 per cent in January.

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Code Inward TTs Outward TTs
CAD 0.65100.6320
JPY 53.691350.6913
GBP 0.35690.3489
EUR 0.40560.3936
NZD 0.69210.6591
AUD 0.64290.6179
USD 0.50070.4837



Exchange Rate updated on 16th, March, 2018

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