U.S. Economy: Consumer Prices Rise by Most in Four Months

The consumer price index, the government's main inflation gauge, rose 3.3% in 2004, the biggest jump in four years, as gasoline prices leapt. Without energy and food costs, the so-called core CPI was up a more modest 2.2% for the year, but that still was double the 1.1% core rate of 2003. The nationwide average rate on 30-year fixed-rate mortgages was at an eight-month high of 5.95% last week, according to mortgage finance company Freddie Mac in Washington. With the jump in Treasury bond yields this week, the mortgage rate is likely to top 6% soon.

And today we find out that:
http://quote.bloomberg.com/apps/news?pid=10000103&sid=aUTOSYlNScNE&refer=news_index

U.S. Economy: Consumer Prices Rise by Most in Four Months

March 23 (Bloomberg) -- U.S. consumer prices rose the most in four months in February, adding to concerns that quickening inflation will prompt the Federal Reserve to accelerate interest- rate increases.

The consumer price index rose 0.4 percent, more than forecast, after January's 0.1 percent gain, the Labor Department said today in Washington. Prices excluding food and energy rose 0.3 percent, the most since September, after rising 0.2 percent.

The report reinforced yesterday's elevated state of alert from the Fed that pricing pressures picked up in recent months, in part because of rising energy costs. Higher prices for gasoline, airfares and lodging contributed to February's gain.

``It should be taken seriously as a hint of rising inflation,'' said Michael Moran, chief economist at Daiwa Securities America Inc., in New York, who predicted the 0.4 percent increase. Fed policy makers ``need to see a sign next month that this was an aberration, or they will go'' for half- point changes in the overnight bank lending rate.
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http://story.news.yahoo.com/news?tmpl=story&ncid=716&e=9&u=/ap/20050323/ap_on_bi_go_ec_fi/economy

Mortgage rates go up, credit rates go up, all incidental costs go up and suddenly people who are mortgaged to the hilt because of the last four years cannot afford their payments.

Anybody see forclosures in the future? How about the bursting of the housing bubble? Bankruptcies -- oops, not an option anymore.

Now we will enter the next period of stagflation, mark your calendar! No more growth, they will battle inflation and gain no more jobs, picture book perfect republican!