WASHINGTON — Consumers paid more to fill up their gas tanks, buy groceries and go to the hospital in January as prices on a range of items climbed.
Inflation was increasing even as the economy was slowing drastically, a development certain to raise concerns at the Federal Reserve. The Fed has cut interest rates aggressively in the belief that fighting off a threatened recession was more important than worrying about inflationary pressures.
The Labor Department reported that its closely watched Consumer Price Index posted a gain of 0.4 percent last month. That matched the December increase and was higher than the 0.3 percent rise analysts had expected. Food costs jumped by the largest amount in 11 months.
Core inflation, which excludes food and energy, rose by 0.3 percent, the biggest jump in seven months. That increase reflected higher prices for medical care, education, clothing, tobacco and airfares.
“The economy may be faltering, but that has not stopped firms from raising prices,” said Joel Naroff, chief economist at Naroff Economic Advisers. “It didn’t matter whether you went to the supermarket or ate out, costs were up.”
With the latest increase, core prices have risen over the past 12 months by 2.5 percent, far above the Fed’s comfort zone of 1 percent to 2 percent gains in the underlying inflation rate. The increase in inflationary pressures comes as economic growth has slowed sharply, raising concerns the country might be in danger of falling into a recession.
For all of 2007, consumer inflation rose 4.1 percent, the biggest increase in 17 years.
Costs of food and energy accelerated sharply. Economists said they still believe that food and energy will moderate this year, although events could change that outlook.
Medical costs showed a 0.5 percent increase, up from a 0.3 percent rise in December. The category that includes education costs rose 0.4 percent, while airline fares were up 0.8 percent, reflecting higher fuel costs, and clothing costs rose 0.4 percent. Analysts blamed the fifth monthly rise in clothing prices on a weaker dollar against many foreign currencies, which pushes the price of imported clothes higher.
