As recently as last month, in a speech in New York, Ms. Yellen warned that the danger of too little inflation still outweighed the risks posed by too much. But even as the Fed's preferred inflation gauge remains contained, the new data from the Labor Department Thursday, including a 12-month rise in consumer prices of 2 percent, suggests inflation is moving within shouting distance of the Fed's target.
A separate Labor Department report on Thursday put new claims for unemployment insurance last week at their lowest level since May 2007, the latest in a series of indicators suggesting a healthier labor market, including the upswing in payrolls reported by employers last month.
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The American economy is still emerging from a very slow patch. The first estimate for the growth rate of the economy last quarter showed that output expanded at a rate of just 0.1 percent, and that number may even drop into negative territory when the Commerce Department revises the figure later this month. Other data this week on industrial production and housing has also been underwhelming, and even some relative optimists like Mr. Shepherdson foresee more headwinds for the housing market as rates rise.
Still, many private experts, as well as the policy makers at the Fed, argue that a substantial part of the weakness last quarter was caused by frigid temperatures and wintry conditions that delayed business activity in many part of the country, rather than a fundamental slowdown.