More Whiffs of Inflation, but Strength in Some of Thursday's Numbers

Consumer prices rose slightly more than expected in January, and still point to a moderate inflation rate, but another number has traders buzzing.


The Philadelphia Fed survey Thursday jumped to 35.9, its highest reading since January, 2004. The employment component showed strength and was at its highest level since 1973. The demand for goods was super strong.

But the prices paid also jumped, and some traders are focused on that number, which rose to 67.2 from 54.3. It has rarely been that high and was not at that level since summer of 2008, when it was at 68.1. The last time prior 2008 that it was close to that level was in 1980, when it hit 72.8.

CPI rose 0.4 percent, and 0.2 on the core, which excludes energy and food. Both numbers were 0.1 percent more than expected, but not as out of line as Wednesday's producer prices, which usually leads consumer prices. The gain is the largest since October, 2009.

Wells Fargo Capital Management chief investment strategist James Paulsen said the consumer inflation data is not a concern at this point. "12 months ago that would have been considered a success to say we were able to raise retail prices," he said. (Click here to watch Paulsen's interview on CNBC)

Bond yields were

off their highs mid morning

, as the data competed with a flight to safety trade on Mideast unrest. Stocks were also off the morning's lows.

Other data Thursday included weekly jobless claims, which were at 410,000, about 10,000 more than expected.

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