Producer prices were up 7.4% from January of last year, the steepest climb since October 1981, the Labor Department said.
The worse-than-expected performance is certain to capture attention at the Federal Reserve. Fed officials have chosen to combat a threatened recession by aggressively cutting interest rates, believing that they have room to do so because weak economic growth will keep a lid on prices.
Yu Yongding, the influential director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences and until 2006 a member of the monetary policy committee of China’s central bank, said that high inflation in January meant that the Chinese government was likely to continue pursuing austerity policies.
To fight inflation, China is likely to allow its currency to “appreciate continuously” so as to hold down the cost of imports, despite signs that economic slowdowns in the United States and elsewhere may cool demand for Chinese exports, Mr. Yu said.
“Inflation is the No. 1 enemy for China,” he said in a telephone interview. “It’s affordable for us to sacrifice a little on the growth side to bring inflation under control.”
Chinese exporters are trying to pass on their rising costs to overseas customers, which could contribute to inflation in the United States and Europe.
Sales at retailers posted a much stronger-than-expected 1.2 percent rise in November, government data showed on Thursday, as holiday shoppers coped with high energy costs and the fallout from a housing slump.
Excluding autos, retail sales gained 1.8 percent, the Commerce Department said.
The Illinois attorney general is investigating the home loan unit of Countrywide Financial as part of the state’s expanding inquiry into dubious lending practices that have trapped borrowers in high-cost mortgages they can no longer afford.
The inquiry follows an investigation by Ms. Madigan’s office into One Source Mortgage, a Chicago mortgage broker that recently closed its doors. Ms. Madigan sued One Source on Nov. 27, contending that the company misled borrowers by promising low rates on mortgages without advising them that their payments would jump sharply shortly after the loans were made. Countrywide was One Source’s primary lender, according to the lawsuit.
Producer prices surged 3.2 percent in November, the biggest rise in 34 years, on a record rise in gasoline prices, the Labor Department said on Thursday.
Excluding food and energy prices, the producer price index rose an unexpectedly large 0.4 percent, the heftiest gain since February, the report showed. When cars and light trucks also were stripped out, core producer prices rose 0.1 percent.
The Senate approved a measure late Wednesday allowing airline pilots to continue flying past age 60.
Final passage of the bill first approved unanimously on Tuesday by the House answers pleas by older pilots who have lost their pensions because of airline bankruptcies. The bill now awaits President Bush's signature.
City and state officials have had discussions with Cubs executives about possibly selling historic Wrigley Field to a state government entity that currently owns and operates the White Sox's home, U.S. Cellular Field, sources close to the Cubs told the Tribune.
The talks with state and city officials centered on selling the 93-year-old facility to the Illinois Sports Facilities Authority, the government unit the Illinois General Assembly created in 1987 for the purpose of building new Comiskey Park, now U.S. Cellular Field.
