Jitters as US consumer inflation jumps (Jitendra Joshi)

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U.S. consumer prices jumped in January

by Jitendra Joshi -- AFP

Feb. 21, 2007 -- U.S. consumer prices jumped in January, the government reported, a week after Federal Reserve chief Ben Bernanke warned that inflation remains the central bank's top concern.

The data spooked some pundits and Wall Street investors who had hoped that receding inflation could set the stage for a Fed rate cut sometime this year.

"The CPI news takes some of the wind out of the excessively optimistic 'Goldilocks' forecast of moderate economic growth with low inflation," Briefing.com equity analyst Dick Green said.

The Labor Department said the consumer price index advanced 0.2 percent last month compared with December on surging food and medical costs. The "core" CPI rate, which excludes volatile food and energy prices, went up 0.3 percent.

On a year-on-year basis, the headline consumer price index was up 2.1 percent and the core CPI rose 2.7 percent.