U.S. Wholesale Prices, Inflation Rose in January; Consumer Confidence Continues to Sink

Washington, D.C.–U.S. wholesale prices and core inflation shot up in January and consumer confidence is down this month, according to a report released Tuesday by the Conference Board, a private research group, and the Labor Department.In addition, the Producer Price Index (PPI) for finished goods increased 1.0 percent on a seasonally adjusted basis, following a 0.3 percent decrease in December, the Labor Department said. The core index–excluding food and energy costs–was up a seasonally adjusted 0.4 percent in January, following an 0.2 percent December rise, The Wall Street Journal reports. Prices rose 7.4 percent on an unadjusted basis in the 12 months ending in January–the biggest jump since 1981. The PPI found wholesale energy prices grew 1.5 percent last month. Gasoline increased 2.9 percent; residential natural gas increased 0.7 percent. Food costs grew 1.7 percent in January after swelling 1.4 percent in December. The Conference Board’s index of consumer confidence showed faith in the U.S. economy is low. The index dropped to 75 this month–its lowest reading in 15 years, discounting the 2003 period that included the Iraq War. The revised January reading was 87.3; the December reading was 90.6.”The weakening in consumers’ assessment of current conditions, fueled by a combination of less favorable business conditions and a sharp rise in the number of consumers saying jobs are hard to get, suggests the pace of growth in early 2008 has slowed even further,” said Lynn Franco, director of the Conference Board’s Consumer Research Center.