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Report: US Consumer Prices Rise at Highest Rate in 5 Years, But Inflation Remains Tame


Consumer prices rose by the largest rate in five years in 2005 as energy prices surged.

But Wednesday's report from the Labor Department shows that overall inflation remains relatively tame.

The consumer price index, CPI, rose 3.4 percent, the most since 2000. But outside the volatile energy and food sectors, prices rose a more modest 2.2 percent. The CPI is the most widely cited inflation indicator.

The report also said that inflation was declining in December, with prices in that month falling one-tenth of a percent.

The U.S. central bank has been trying to fend off inflation by gradually raising interest rates. Many economists expect the Federal Reserve to continue raising interest rates a little further.

Some information for this report provided by Bloomberg, AP, AFP, and Reuters

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