US inflation move slightly higher in January. Revisions remove much of the volatility from data previously reported for 2011
US GDP growth slowed to 1.9% in Q1 2012, down from 3% in Q4 2011, marking the 11th consecutive quarter of growth but also a slowing recovery. Consumption and investment contributed most to growth while government spending continued to decline. Corporate profits declined for the first time since 2008 due to a decrease in foreign profits offsetting domestic growth as the world economy slowed. The nominal GDP gap remains large compared to potential growth targets.
Consumer prices in the US rose 1.4% in January compared to a year ago, showing signs of accelerating inflation. While rising costs for housing and healthcare were offset by lower oil prices, core inflation excluding food and energy rose 0.3% for the month and 2.2% over the last year. The Federal Reserve is monitoring inflation closely as it aims for a target of 2% annual inflation. While lower gas prices and a strong dollar have kept inflation down, housing costs continue to rise steadily. The report suggests inflation may be picking up gradually in line with the Fed's goals.
US real GDP rose by 2 percent in Q3 2012, up from 1.2 percent in Q2, but exports decreased for the first time since the recession ended