U.S. consumer prices jumped more last month than they have in the past four years, according to a newly released report from the Department of Labor. And you can blame a lot of that increase on the price of gas.
Cheryl Abbot is the regional Texas economist of the Bureau of Labor Statistics, says there is a clear target for inflationary pressure. “It’s energy,” she tells KTRH News. “Energy prices, which had been declining the last couple of years on an annual or a monthly basis, finally turned positive in the last few months.” She says even though the new figures are a reflection of a national trend, we’re seeing it here, too. “Even though Houston’s pricing period is delayed by a month, we did see increases in energy prices and shelter prices,” she says.
Those shelter prices have to do with keeping a roof over the head, and Bankrate.com Chief Financial Analyst Greg McBride says the pinch is going to hit those on limited incomes the hardest. “What inflation does is threaten to eat away at the buying power of that fixed income,” he says. McBride thinks the upward drift of consumer prices will force the Fed to adjust policy. “Inflation is moving higher, and that is something that could prompt the Federal Reserve to raise interest rates either sooner or perhaps more aggressively in 2017 than they had originally planned.”
McBride says they could make a move as early as next month.