The Commerce Department reports inflation in January hit the highest annual rate since October 2012, offsetting rising household incomes and raising the odds of an interest rate hike. The Personal Consumption Expenditures index was up 0.4% in January, pushing inflation to 1.9% annually, up from 1.6% in December. Consumer spending rose 0.2%. Economists expected 0.4%, but incomes also rose 0.4%. The rise in inflation over the past year is linked to the rebound in the cost of oil,but rent and medical care have also increased. The savings rate was unchanged at 5.5%
The Commerce Department also reports construction spending fell 1.0% in January, lead by drops in roads and schools. Economists expected a 0.6% increase. December was revised from a 0.2% drop to a 0.1% gain. Spending in January was a seasonally adjusted annual rate of $1.18 trillion, 3.1% higher than a year ago. Private spending was 0.2% higher than in December, while public construction projects was 5.0% lower.
Serving the West Side first, I am Bill Roller of BR Capital for 1360 KUIK.
