Food prices climbed 0.5 percent in January, the most in more than two years. Still, food costs in the United States are tame compared with the raging inflation in many developing countries. Those countries are more vulnerable to steep rises in the prices of corn, wheat, coffee, and other commodities.
Other reports yesterday showed:
■ More people are applying for unemployment benefits. Applications rose last week to a seasonally adjusted 410,000, the Labor Department said. The increase follows a week when applications fell to their lowest level in nearly three years. But that decline was due partly to snowstorms that closed some government offices and kept people from applying for benefits.
■ Fewer homeowners are falling behind on their mortgages. The Mortgage Bankers Association said 8.2 percent of homeowners missed at least one mortgage payment in the October-December quarter. That’s down from 9.1 percent in the previous quarter and a high of more than 10 percent in the January-March quarter. But foreclosures are still rising.
■ The average rate on a 30-year fixed mortgage fell to 5 percent this week from 5.05 percent, according to Freddie Mac. The average rate had reached a 40-year low of 4.17 percent in November.
■ A private research group’s gauge of future economic activity rose 0.1 percent in January, much less than in recent months. Still, the rise in the Conference Board’s index of leading economic indicators was the seventh straight monthly advance.
The report on consumer prices showed that some companies are trying to pass on higher prices for oil, cotton, and agricultural products. In January, a measure of wholesale inflation rose at the fastest pace in more than two years.
But high unemployment and weak wage increases are limiting the ability of many retailers to raise prices.
“With the unemployment rate still at 9 percent, there will be plenty of downward pressure on underlying prices, and so we don’t expect core inflation to trend upwards,’’ said Paul Ashworth, an economist at Capital Economics.
