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Consumer price index on the rise in the US

THE cost of living in the United States rose last month for the first time in six months as gasoline stopped sliding and retailers tried to push through start-of-year increases even as sales slumped.

The consumer price index rose 0.3 percent, as forecast, after dropping 0.8 percent in December, Labor Department figures showed yesterday in Washington. Excluding food and fuel, the so-called core rate climbed 0.2 percent, more than anticipated, reflecting gains in autos, clothing, and medical care.

The price gains may not stick as more companies follow Wal-Mart Stores Inc and Macy's Inc in offering discounts as the economy sinks into recession. Some Federal Reserve policy makers have expressed concern at the risk that the deceleration in prices may give way to deflation, or a prolonged drop that hurts lenders and profits.

"There's no sense that we'll see a major acceleration anytime soon," in inflation, Jonathan Basile, an economist at Credit Suisse Holdings in New York, told Bloomberg News before the report was released.


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