Ahead Of The Bell: Consumer Prices
WASHINGTON (AP) â¿¿ Consumer prices probably rose in January for the first time in four months because of rising gas costs. But economists are downplaying the anticipated bump because inflation has been tame otherwise.
Economists forecast that the consumer price index increased 0.3 percent in January, according to a survey by FactSet. That would follow flat readings for the two previous months and a drop of 0.1 percent in October.
Excluding volatile food and gas costs, so-called "core" prices are expected to have risen 0.2 percent, up from December's 0.1 percent increase.
The Labor Department will issue its report at 8:30 a.m. Eastern time Friday.Low inflation, combined with recent modest increases in income, gives consumers more buying power and should add to economic growth. A sharp jump in gas and food prices early last year left Americans with less money to spend on other items, dragging on the economy. Modest price increases also give the Federal Reserve more room to keep interest rates low, as part of its efforts to accelerate growth. It recently said it plans to keep the short-term rate it controls near zero at least until late 2014. If inflation were to rise rapidly, the Fed would come under pressure to increase rates. A small amount of inflation can be good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value. Consumer prices rose 3 percent in December, compared to a year earlier, down from a 3.4 percent pace in the previous month. That's also below the recent peak in September, when prices were 3.9 percent higher than a year earlier. Many economists say inflation has likely peaked and they expect it to slowly decline this year. The prices of many farm commodities, such as corn and wheat, have declined. That's slowed the growth in the cost of food on grocery store shelves.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV