Tag Archives: gasoline

Higher gasoline, rental costs boost U.S. consumer inflation

customer shopping at walmart

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. consumer prices rose in December as households paid more for gasoline and rental accommodation, leading to the largest year-on-year increase in 2-1/2 years and signaling that inflation pressures could be building.

The Labor Department said on Wednesday its Consumer Price Index rose 0.3 percent last month after gaining 0.2 percent in November. In the 12 months through December, the CPI increased 2.1 percent, the biggest year-on-year gain since June 2014. The CPI rose 1.7 percent in the year to November.

The increases were in line with economists’ expectations. The CPI rose 2.1 percent in 2016, up from a gain of 0.7 percent in 2015.

U.S. Treasury prices fell and the dollar strengthened against the euro and yen after the data. U.S. stock index futures were trading higher.

Rising inflation comes against the backdrop of a strengthening economy and tightening labor market, which raises the specter of a faster pace of interest rate increases from the Federal Reserve than currently anticipated.

The U.S. central bank has forecast three rate hikes this year. It raised its benchmark overnight interest rate by 25 basis points to a range of 0.50 percent to 0.75 percent last month.

Price pressures are likely to remain on an upward trend amid expectations of fiscal stimulus from the incoming Trump administration. Republican businessman-turned-politician Donald Trump, who will be sworn in as U.S. president on Friday, has pledged to increase spending on infrastructure and cut taxes.

The so-called core CPI, which strips out food and energy costs, rose 0.2 percent last month after the same increase in November. As a result, the core CPI increased 2.2 percent in the 12 months through December, from 2.1 percent in November.

The Fed has a 2 percent inflation target and tracks an inflation measure which is currently at 1.6 percent.

Last month, gasoline prices jumped 3.0 percent after climbing 2.7 percent in November. Food prices were unchanged for a sixth straight month. The cost of food consumed at home dropped for an eighth consecutive month.

Within the core CPI basket, housing continued its upward march in December. Rents increased 0.3 percent last month, with owners’ equivalent rent of primary residence also rising 0.3 percent. Rents increased 4.0 percent in 2016.

The cost of medical care rose 0.2 percent last month, with the prices for doctor visits unchanged. Prices for prescription medicine increased 0.2 percent. The cost of hospital services rose 0.3 percent.

There were price increases for a range of other goods and services last month including motor vehicle insurance, which increased 0.8 percent. The cost of airline fares rose 1.9 percent in December after falling 1.3 percent in November.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Colonial expects restart of gasoline line on Wednesday after leak

Vehicles wait in line for gas at a Twice Daily gas station on Franklin Road in Brentwood, Tennessee, U.S.

NEW YORK (Reuters) – United States.Colonial Pipeline Co said it expects a full restart of its gasoline line by Wednesday evening after its biggest leak in nearly two decades squeezed supply and led to increased prices at the pump in southeast

The biggest refined products system in the U.S. restarted parts of the line a few days after a leak was discovered on Sept. 9. The damaged section of the 1.3 million-barrel-a-day line that connects the refining hub of the Gulf Coast to the East Coast has been shut for more than 12 days.

Motorists have faced long lines and shortage of fuel in many states across the southeast, such as North Carolina and Tennessee.

Consumers are expected to feel the pinch for slightly longer, until the supply chain is fully restored after the 6,000-8,000 barrel leak in Shelby County, Alabama.

Prices in Georgia, one of the most affected, inched up by another cent on Wednesday, with a gallon of regular gasoline currently at $2.372, about 28 cents higher than last week’s average prices, according to motorist advocacy group AAA.

The outage led to a record drop in inventories in the East Coast and sent Gulf Coast gasoline stockpiles soaring to record highs.

The company built a section of pipe to bypass the damaged portion, in order to restart operations quickly. The U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) approved the operation of the bypass as a temporary measure to restore service, late Tuesday.

That approval, however, does not affect the terms of the Corrective Action Order PHMSA issued on Sept. 16.

Colonial said it successfully tested and completed the connection of the bypass segment to the main line on Wednesday morning.

After the line is restarted, Colonial will work with federal, state and local officials to remove the damaged segment of the original line and also try to determine the cause of the leak. It was discovered on Sept. 9 by a mining inspector who smelled a fuel odor.

(Reporting by Devika Krishna Kumar in New York; Editing by Chris Reese)