Rising consumer prices could allow the Fed to lift interest rates later Wednesday. But as Fred Katayama reports, sluggish retail sales growth suggests the economy may have lost further momentum.
Consumer prices edging higher in the U.S. in February - a sign of firming inflation that could allow the Federal Reserve to hike interest rates later Wednesday. The Consumer Price Index inched up 0.1 percent and January's data was revised upward. Boosting the index last month: rising prices for food and rent. In the past 12 months through February, that index has risen 2.7 percent. That's the biggest year-on-year gain in nearly five years. Capital Economics' chief U.S. economist Paul Ashworth said, "Nothing here to suggest the Fed shouldn't raise interest rates at the policy meeting that concludes later today." While prices are rising, the economy may have lost further momentum in the first quarter. Retail sales edged up just 0.1 percent last month. That's the smallest increase in six months as consumers cut back on buying electronics products, appliances and vehicles. Retail sales joins earlier data on trade, construction and business spending that point to sluggish economic growth. As fewer cars and trucks were sold, vehicle inventories grew, pushing up overall business stockpiles in January.