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Consumer prices up more than forecast

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January consumer prices in the United States increased more than expected, indicating that the wavering economy has not eased inflation pressures, Bloomberg reported. The 0.4 percent rise in the cost of living matched the gain in December, the Labor Department said today. Excluding food and energy, prices climbed 0.3 percent, after a 0.2 percent rise in December, sending the core rate to the biggest increase since June 2006.

A jump in food and energy costs, rents and clothing prices pushed the index higher last month. The report highlights that Federal Reserve policy makers cannot set aside inflation concerns as they consider additional interest-rate cuts to prevent a recession.

Economists forecast the consumer price index would increase 0.3 percent, according to the median of 74 projections in a Bloomberg News survey. Estimates ranged from an increase of 0.1 percent to one of 0.4 percent.

Energy prices last month rose 0.7 percent after an increase of 1.7 percent in December, spurred by a 4.5 percent surge in fuel costs. Food prices, which make up about a fifth of the CPI, were up 0.7 percent. Apparel prices rose 0.4 percent. Rents, which account for almost 40 percent of the core CPI, increased 0.3 percent.

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