Ticker: Inflation ticked up in December; FDA bans red dye No. 3 from food
U.S. inflation accelerated last month as prices for gas, eggs, and used cars rose, yet underlying price pressures also showed signs of easing, bolstering hopes that the Federal Reserve could still cut its key interest rate this year.
The consumer price index rose 2.9% in December from a year ago, Wednesday’s report from the Labor Department showed, up from 2.7% in November. It was the third straight increase.
Yet excluding the volatile food and energy, so-called core inflation declined to 3.2% after remaining frozen at 3.3% for three months. Economists pay close attention to core prices because they typically provide a better guide of inflation’s future course.
The report presents a mixed picture, with consumers still grappling with high prices for essentials such as groceries, and housing. At the same time, increases in apartment rental prices are slowly easing and clothing costs barely rose last month. If core prices continue to match December’s pace, inflation should move closer to the Fed’s 2% target.
FDA bans red dye No. 3 from food
U.S. regulators on Wednesday banned the dye called Red 3 from the nation’s food supply, nearly 35 years after it was barred from cosmetics because of potential cancer risk.
Food and Drug Administration officials granted a 2022 petition filed by two dozen food safety and health advocates, who urged the agency to revoke authorization for the substance that gives some candies, snack cakes and maraschino cherries a bright red hue.
The agency said it was taking the action as a “matter of law” because some studies have found that the dye caused cancer in lab rats. Officials cited a statute known as the Delaney Clause, which requires FDA to ban any additive found to cause cancer in people or animals.