US prices data best for 4 1/2 years
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.CONSUMER prices in the US stabilised in January, the most encouraging performance for 4 1/2 years, beating Wall Street expectations of a fresh rise in prices.
But an initial rally yesterday in US Treasury bonds later gave way to a wave of selling on fears of higher short-term rates in the US later this year.
Despite the promising inflation news the markets fear that the Federal Reserve will again lift rates to ensure that the strong economic expansion does not produce fresh inflation pressures.
Stable prices last month partly reflected new methods for calculating inflation, which have eliminated normally volatile price movements early in the year. Excluding erratic food and energy prices, the core consumer price index edged up by just 0.1 per cent.
Economists were cheered, however, by the absence of fresh inflation despite the strength of the economy, which suggests that another Fed tightening may occur much later than some assumed.
On a more worrying note, official figures revealed that the US trade deficit swelled by 37 per cent to dollars 115.8bn last year, the highest since 1988. The politically sensitive deficit with Japan accounted for 51 per cent of the total.
The 1993 total was almost double the shortfall in 1991 and well above the 1992 deficit, reflecting the expanding economy.
The annual figures, however, masked the fact that in December the deficit dipped by more than dollars 2bn to dollars 7.4bn, far below Wall Street forecasts. Exports during the month expanded by 4.9 per cent to a record dollars 42.2bn while imports shrank slightly to dollars 49.6bn.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments