NYT:Consumer Price Rise Quickens, Giving Fed a Basis to Raise Rates

[Born Free]

October 20, 2004

Consumer Price Rise Quickens, Giving Fed a Basis to Raise Rates
By THE ASSOCIATED PRESS


WASHINGTON, Oct. 19 (AP) - Consumer prices picked up momentum in September, with the most difficulty for people paying for medical care, education and gasoline, the Labor Department reported Tuesday.

Analysts said that although inflation is not a danger to the economy now, the acceleration justifies an interest rate increase next month by the Federal Reserve. They expect the Fed to lift short-term interest rates for a fourth time this year at its meeting on Nov. 10.

The government's most closely watched inflation measure, the Consumer Price Index, increased 0.2 percent in September, up from a 0.1 percent rise in August. Excluding energy and food prices, which can vary widely, so-called core prices rose 0.3 percent. That compared with a 0.1 percent increase in August.

The rise in core retail prices mostly reflected a sharp increase in lodging costs, not a broad acceleration in the prices of many goods and services, economists noted. Given that, the increase in core prices rings no alarm bells, analysts said. The 0.3 percent rise surpassed the 0.2 percent some economists were forecasting. Over all, the 0.2 percent price increase matched expectations.

Among areas with notable price increases, medical care rose 0.3 percent last month, education was up 0.6 percent and lodging, 2.9 percent.

more at:http://www.nytimes.com/2004/10/20/business/20econ.html


personal note: get ready for when Kerry takes over, Greenspan will come down on him like a ton of bricks - suddenly everything they say is ok now will need fixing as soon as Kerry takes over and the right wing will be crying it's all Kerry's fault!

[Demeter]

1. Been There, Done That

The good thing is, the economy couldn't get much worse here when Greenspan puts the screws on. Michigan is choking to death.