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Inflation Rises 0.4% on High Food and Gas Costs

WASHINGTON - A big jump in food and gas costs pushed consumer prices up in January, but outside those volatile categories inflation was relatively tame.

The Consumer Price Index rose 0.4 percent last month, matching December's increase, the Labor Department said Thursday. In the past year, the index has risen 1.6 percent.

Excluding food and energy, the core index rose 0.2 percent. That's the largest increase in more than a year. Core prices increased 1 percent over the past 12 months. That's higher than December's 0.8 percent annual pace, but well below the Federal Reserve's preferred range of closer to 2 percent.

Food prices increased 0.5 percent in January, the most in more than two years. Energy costs jumped 2.1 percent.

Other big price increases were reported for clothing and airfares. Clothing prices rose 1 percent in January, as apparel companies seek to offset the rising cost of cotton.

Airline fares increased for the fifth month in a row, rising 2.2 percent. Airlines are struggling with higher jet fuel costs. Delta Air Lines Inc. increased its business class fares earlier this week, a move quickly matched by its competitors.

The cost of housing, which makes up about 40 percent of the core index, rose 0.1 percent, reflecting increases in rents.

Commodities such as cotton, oil, corn, and other grains are pushing up costs for businesses, and some are rising their prices. But the impact hasn't broadly impacted consumers yet.

Some economists expect consumer prices, outside of food and energy, to tick up this year as more companies pass on their rising costs.

On Wednesday, the Labor Department said that wholesale prices, excluding volatile food and energy categories, rose in January at the fastest pace in more than two years.

In a separate report Thursday, the department said that more people applied for unemployment benefits last week, a week after applications fell to their lowest level in three years. The big drop had occurred because snowstorms in many parts of the country closed some government offices and kept people from applying for benefits.

The department said that the number of people applying for unemployment aid rose by 25,000 to a seasonally adjusted 410,000.

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