Consumer prices in U.S. little changed as fuel costs drop

Fed’s View

During that meeting, Fed officials opted to keep buying $45 billion a month of Treasuries and $40 billion in mortgage-debt without setting a limit on the duration or total size of the purchases. They also affirmed a pledge to hold their target interest rate near zero “at least as long” as joblessness remained above 6.5% and inflation was expected to be no more than 2.5%.

The Fed’s preferred price measure, issued by the Commerce Department and tied to consumer spending, rose 1.3% in the 12 months ended December.

Slow economic growth is making businesses like Ruth’s Hospitality Group, which operates the Ruth’s Chris Steak House chain, reluctant to raise prices.

“While we believe we have additional pricing power, we expect to be thoughtful and prudent with respect to future increases,” Michael O’Donnell, president and chief executive officer of the Heathrow, Florida-based company, said during a Feb. 15 earnings call. “With the current economic backdrop, it is still our strategy to focus on growing sales through traffic gains and maintaining our value orientation.”

Other Measures

A Labor Department report yesterday showed prices paid to producers climbed 0.2% in January on rising food costs. Import prices in the U.S., reported Feb. 13, also advanced 0.6% last month, propped up by more expensive fuel.

The CPI is the broadest of the three monthly price measures from the Labor Department because it includes both goods and services. About 60% of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

Bloomberg News

<< Page 3 of 3

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome