Inflation Eats Up most Income Gains

Published on:
12 September 2006 at 10:20 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00009916-inflation-eats-up-most-income-gains/

By Rex Nutting, MarketWatch

U.S. personal incomes rose 0.7% in January, but higher inflation eroded most of the gains, the Commerce Department reported Wednesday.

Consumer inflation increased 0.5% in January on higher energy costs. Core inflation, which strips out food and energy costs to give a better view of underlying inflation pressures, increased 0.2%.

Core inflation has risen 1.8% in the past 12 months, down from 1.9% in December and just below the 2% lid the Federal Reserve would like to keep on core inflation. It’s the lowest year-over-year core inflation since March 2004.

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