Inflation on the rise in America

Prices of US consumer goods undergo a hike.

Source: Press TV
http://www.presstv.ir/detail/165793.html

The US Labor Department has reported a price hike on all consumer goods in America, outstripping lower inflation rates that had been forecasted by economists.

The January figures show a 0.4-percent increase that has affected prices of everything from vegetables to unleaded fuel, AFP reports.

While gasoline prices have leaped over 13 percent in the past 12 months, grocery prices rose by just over two percent, a trend that has increasingly worried experts.

"Rising oil prices have been driving gasoline higher for some time, and now we are also seeing rising food costs filter through to the consumer," says Nigel Gault, an economist with IHS Global Insight.

"The January... figures point to what I believe is the beginning of a substantial uptrend in core inflation," says Stephen Stanley another expert with Pierpont Securities.

The inflation hits American consumers hard since it comes at a time when their real earnings have declined during the last three months.

US officials, however, have dismissed the rise in prices of common consumer goods as an “aberration.”

US Federal Reserve chairman Ben Bernanke has focused on low "core inflation," which strips out volatile food and energy prices, as a sign that demand remains weak due to persisting high unemployment.

In an effort to stimulate the American economy, the Fed is pumping USD 600 billion into the economy and has kept ultra-low interest rates on hold.