A .04% increase in U.S. consumer prices posted in the newest Labor Department economic report is the sharpest jump in nearly a year, with the increase in fuel costs being a major factor. Seasonally adjusted core prices rose slightly by .01% without factoring volatility in food and energy. Tallies were slightly below analysts’ projections while, overall, consumer prices have shown an incremental increase of 2.9% over the past year while the core rate has climbed 2.2% over the same period. Treasury prices continued to be stressed while the dollar headed south after the increase in consumer pricing was reported. The U .S. Dollar index saw a loss of .166 to 80.059 while the Euro rose to 1.3116, up $.0019 from previous market close. 10 year treasury yields saw a 6 point upswing to 2.34%. The dollar rose by .15% against the Yen to hold strong at 83.57. Crude oil declined to $105 per barrel in yesterday’s electronic trading as the futures market deliberated the possibilities of Britain and the US releasing petroleum reserves to offset rising fuel prices, but climbed slightly today in early trade to touch $106/bbl. ETFs wer’e watching after the report United States Gasoline Fund (NYSEARCA:UGA) +1.06% approaching noon hour Friday in New York United Sates Oil Fund (NYSEARCA:USO) +0.57 as oil trades close to $106/bbl. SPDR Energy Select Sector ETF (NYSEARCA:XLE) +0.67% and up approximately 8% since the beginning of 2012. Consumer Discretionary Select Sector SPDR (NYSEARCA:XLY) -0.5% on the likelihood that the consumer will remain pressured by higher energy prices. The Standard & Poor Index reclaimed the 1400 level for the first time since 2007 this week, and many analysts expect the trend to continue as financial data point towards continually improving economic conditions in the United States. However, some economists fear that, even with upswings in general economic reports, the price of crude oil could possibly challenge the overall economic recovery and U.S. equity markets.

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