Consumers strained by price surge last year

Consumers strained by price surge last year
Wed Jan 16, 2008 6:13pm EST

By Glenn Somerville

WASHINGTON (Reuters) - Shoppers faced moderate
price rises in December, but that capped a year in
which prices soared at the sharpest rate in 17 years,
pressuring households also dealing with a steep
housing downturn and tighter credit.

The Labor Department said on Wednesday its Consumer
Price Index rose 0.3 percent in December, less than half
November's 0.8 percent jump. For all of 2007, the CPI
rose 4.1 percent, well ahead of 2006's 2.5 percent gain
and the steepest since 1990.

Separately, the Federal Reserve said output by the
nation's mines, factories and utilities was flat in
December and in 2007 posted its weakest gain since
2003.

The data, combined with a report on Tuesday showing
a drop in December retail sales, "underlines our view
that we're on the razor's edge here, that we could be
headed into recession," said Mike Schenk, senior
economist with Credit Union National Association in
Madison, Wisconsin.

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