Core consumer prices in the U.S. rose by the largest amount in more than a year during the first month of 2011, suggesting that low inflation may be starting to pick up, according to Reuters. On Thursday, the Labor Department reported that the core component of the consumer price index rose by 0.2% in January after a 0.1% gain in December, beating economists’ forecast for another 0.1% gain to open 2011. The data is seen as an indication that “the disinflation process bottomed in the fourth quarter,” said Michael Gapen of Barclays Capital.
The overall CPI also beat forecasts, moving up 0.4% in January after wholesale prices were also seen surging to open the year. Core inflation was 1% higher year-over-year, which is the largest annual increase since March 2010. Meanwhile, a separate report from the Conference Board showed its leading index rose 0.1% to 112.3 in January, after a 0.8% gain the previous month. Also, the Labor Department reported that initial claims for unemployment benefits rose by 25,000 to 410,000, erasing part of a big decline the week prior and edging economists’ forecast for a rise to 400,000 in the latest week.