Inflation… Going Up

By John Stith
Staff Writer
Article Date: 2005-04-20

Inflation continues to skyrocket as the consumer price index climbs .6% and combined with February's numbers, pushing it up a full point for the yearly rate to 4.3%. During all of last year, the index only went up 3.3%.

Energy prices are primary culprit but airfares and some consumables like clothing also figured in. Traditionally, inflation stays mainly with the energy area but the Fed is beginning to worry as inflation spreads to other areas as well.

With clothing costs rising, airfare on the to deal with fuel costs, and hotel rates hitting record highs, the picture is questionable. The only real good point that food cost increases remained pretty minimal.

The Fed bases their primary inflation decisions on the core inflation rate because it gives them a stronger overall picture because it excluded food and energy prices and it's up .4%.

While the dollar did strengthen against other currencies, the Fed is expected to raise rates again to counter rising inflation. With producer prices climbing, consumer prices climbing, and energy prices volatile and climbing, the Fed governors are watching everything closely.

About the Author:
John Stith is a staff writer for WebProNews covering technology and business.