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WASHINGTON - The government reported today that consumer inflation rose 0.2 percent in January, lifted by the largest increase in gasoline prices in four months and higher prices for fruits and vegetables, The Associated Press reports.
The Labor Department's Consumer Price Index, a closely watched inflation gauge, reported a 0.1 percent dip in consumer prices in December, according to the AP.
For the 12 months ending in January, consumer prices rose by just 1.1 percent, the smallest increase since the 12 months ending December 1986.
While many economists believe the Fed's rate cuts will pave the way for solid economic growth in the second half of this year, analysts expect companies will continue to find it difficult to raise prices, which should keep inflation in check in the coming months.
Food prices rose 0.3 percent in January, after being flat in December. Vegetable prices climbed 4.1 percent last month, the biggest increase in almost a year, and fruit prices increased 3 percent, the largest rise since July 2000. Those high prices outweighed lower prices for beef, veal, poultry and dairy products.