Economic Update

[Adam in CO]

Last Week in the News

The Consumer Price Index rose by 0.2% in January, as falling energy prices only partially offset big increases in the cost of medical care and airline tickets, the Labor Department reported February 21. Although smaller than December's 0.4% rise, consumer prices were higher than the 0.1% increase Wall Street had forecast. Core inflation, which excludes volatile energy and food prices, also was up more than analysts had expected, rising by 0.3%. It was the largest one-month gain in seven months.

However, in minutes released on February 21 from its late-January policy meeting, the Federal Reserve said the outlook for core inflation had improved. It stated that a confluence of "better-than-expected news" on the economy and inflation suggested there were smaller risks to growth and improved prospects for inflation.

The Conference Board's Index of Leading Economic Indicators -- designed to forecast economic activity over the next three to six months -- rose by 0.1% in January. Although not the 0.2% rise analysts had anticipated, the reading suggested continued modest growth for the U.S. economy.

The number of people filing new claims for unemployment insurance fell by 27,000 for the week ended February 17, the Labor Department said February 23. Although not as large a drop as economists had expected, it was a sharp improvement over the prior week when claims jumped by 46,000.

For the week ended February 22, interest rates on 30-year and 15-year mortgages fell, Freddie Mac said. With the latest decline, mortgage rates are slightly lower than they were at this time a year ago.

This week look for updates on existing home sales on February 26.