Rate hike fears grow in US as prices surge
Thursday 11 November 1999
New figures showed a 0.3 per cent increase last month in "core" producer prices (excluding food and energy. This followed a 0.8 per cent jump in September. The figures sent the 30-year Treasury bond yield up to 6.11 per cent as its price fell half a point, although share prices showed no reaction.
Analysts focused on the bigger-than-expected rise in core prices, even though the headline figure fell by 01 per cent after spiking up by 1.1 per cent the previous month.
The main contributors to the rise were pharmaceutical products and cars. Passenger car prices were up by 1.1 per cent in the month, and light truck prices rose 0.8 per cent.
Car prices also rose strongly in September, when makers introduced new models a month earlier than usual. Not only was the normal end-of-year discounting in that month absent, but there was no decrease in October either. "For the first time in years, car makers think they can pass through price increases," said Christopher Low, an economist at First Tennessee Capital Markets in New York.
However, other analysts said inflationary pressures were benign outside one or two categories. Food, energy and computer prices all fell. Opinions on Wall Street remain evenly divided on the Fed's decision next Tuesday, with evidence of inflationary pressures still sparse despite strong growth.
The Fed's Open Markets Committee raised its target Federal Funds interest rate by a quarter-point in June and again in September. It now stands at 5.25 per cent. Interest rates have risen this month in both the UK and Euroland.
A separate report showed that US jobless claims fell last week, suggesting that the labour market remains strong.
The Labor Department said that first-time unemployment benefits fell by 6,000 to 285,000 from a revised 291,000 in the previous week. This compared to economists' forecasts of figure of 290,000.
peopleContenders for Time magazine's Person of the Year are a mixture of the good, the bad and the holy
newsAs the world remembers Mandela the hero, the prison where he spent 27 years seems all the more brutal
tvSteven Moffat reveals the actor was dying to take on the role of the Time Lord and says he is excited to see what he will do with the character
sportBayern Munich 2 Manchester City 3: City come from two down to beat reigning European Champions
arts + ents... and a chance to paint Booker Prize winning author Hilary Mantel
danceUnder Tamara Rojo's inspired direction, it seems possible that it could challenge the dominance of the Royal Ballet. We meet some established names and rising stars
travelDiscover Uruguay's jet-set beach resort, an Atlantic enclave with plenty of art and culture to explore on the side
The ten coldest places on Earth
Sir Ian McKellen hits back at Damian Lewis' 'fruity actor' claims
Kenyan politician Mike Sonko left red-faced after photoshopping himself next to Nelson Mandela
Krokodil in Mexico? Teenager hospitalised after 'injecting drug into her genitals'
Nelson Mandela memorial: Cheers, jeers and a masterclass from Barack Obama that stole the show
- 1 Mountain goats' miraculous escape from avalanche captured in dramatic video footage
- 2 It’s shameful that our universities have accepted gender segregation under pressure from the most oppressive religious fanatics
- 3 Sir Ian McKellen hits back at Damian Lewis' 'fruity actor' claims
- 4 Kenyan politician Mike Sonko left red-faced after photoshopping himself next to Nelson Mandela
- 5 Selfie at funeral: Cameron squeezes in on Obama snap at Mandela memorial
- < Previous
- Next >
iJobs Money & Business
£70000 - £90000 per annum + benefits + bonus: Pro-Recruitment Group: Our leadi...
£50000 - £65000 per annum + BONUS + BENEFITS: Harrington Starr: A leading mark...
£60000 - £85000 per annum + BONUS + BENEFITS: Harrington Starr: A leading asse...
£45000 - £70000 per annum + Bonus + Benefits: Harrington Starr: Technical Impl...