Inflation renews pressure on Fed

0 Comments | USA TODAY, May, 2006 | by Sue Kirchhoff

WASHINGTON -- Consumer inflation surged faster than expected in April, the government said Wednesday in a report that unnerved financial markets and could make it more likely that the Federal Reserve will continue raising interest rates to keep price pressures in check.

"It's time to get worried," says Stephen Cecchetti, global finance professor at Brandeis University. "Inflation, by virtually every measure, is up."

The Labor Department said the consumer price index (CPI) jumped 0.6% in April, pushed higher by rising energy, health care and other costs. The increase followed a 0.4% leap in March. Consumer prices rose by a seasonally unadjusted 3.5% in the 12 months ended in April.

More worrisome for economists and stock and bond traders, core inflation --...