Thursday, February 18, 2010

Is Inflation kicking in?

Is this the beginning of the inflationary spiral we have feared since the passage of the stimulus bill one year ago?

Stripping out the volatile food and energy costs, core producer prices rose a faster than expected 0.3 percent last month after being flat in December. The core index, which had been forecast to rise 0.1 percent, was lifted by a surge light motor truck and pharmaceutical prices.

"It does present some upside risks to our call for only modest gains in CPI and also points to some possible upward price pressures in the pipeline," Millan Mulraine, an economics strategist at TD Securities in Toronto.

The department on Friday will release its consumer price report for January. Headline CPI is seen rising 0.3 percent from December and core CPI gaining 0.1 percent, according to a Reuters survey.

H/T Reuters v/a Yahoo news.

Click here for speculation on the coming inflation's impact on real estate prices.

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