Energy Boosts January’s Inflation

A sharp rise in energy costs pushed U.S. consumer prices up last month at the fastest pace in nearly a year, but underlying price pressures remained subdued, a government report showed Friday.

The consumer price index, the most widely used gauge of U.S. inflation, climbed 0.5% in January after a 0.2% rise the month before, the Labor Department said.

The so-called core CPI, which strips out volatile food and energy prices, gained 0.2%.

Wall Street economists had expected the overall CPI to rise 0.3% and the core index to tick up 0.1%.

Although larger than expected, the mild increase in core inflation kept the core measure’s 12-month increase steady at 1.1%, a 38-year low.

The data suggest -- at most -- that inflation is stabilizing after a period of slowing, economists said, adding that the benign core inflation reading meant the Federal Reserve could bide its time before pushing up overnight interest rates from 1%, their lowest level since 1958.

“This is not worrisome from the Fed’s standpoint but an acceptable

Much of the increase in overall consumer prices was the result of a big jump in energy costs, which were up 4.7% last month, their biggest increase since March.

Gasoline prices rose 8.1%, their largest jump since February 2003, while fuel oil costs surged 7.2% and natural gas prices increased 3.8%.

The energy price rises helped lead to a sharp 1.7% increase in transportation costs, even though prices for new cars fell. And the higher price of heating a home helped push housing costs up 0.4%, the sharpest gain since March.