Plunge in gas prices pulls down CPI in US
Source: Agencies |
June 15, 2012, Friday
|
Print Edition
Print Edition
A MEASURE of US consumer prices fell in May by the most since December 2008, pulled down by a plunge in gas prices. Excluding volatile food and energy costs, prices rose only modestly.
The US Labor Department yesterday said the Consumer Price Index shed 0.3 percent. Gas prices sank 6.8 percent, also the most since December 2008. Food costs were flat.
Mild price increases give consumers some relief at a time when unemployment is high and wage gains are meager. Lower inflation also gives the Federal Reserve more leeway to keep interest rates low.
So-called "core" prices, which exclude food and energy, rose 0.2 percent for the third straight month.
Over the past 12 months ending in May, consumer prices rose 1.7 percent, much less than the pace for the 12 months that ended in April. Core prices have risen 2.3 percent in the past year, the same as for the 12 months ending in March and April. That's close to the Fed's 2 percent target for inflation.
Some economists said the slowdown in overall price increases makes it more likely the Fed will unveil some new step to boost the still-weak economy when it meets next week. If inflation were threatening to accelerate, Fed policymakers might feel compelled to raise interest rates or take other steps to fight rising prices.
The US Labor Department yesterday said the Consumer Price Index shed 0.3 percent. Gas prices sank 6.8 percent, also the most since December 2008. Food costs were flat.
Mild price increases give consumers some relief at a time when unemployment is high and wage gains are meager. Lower inflation also gives the Federal Reserve more leeway to keep interest rates low.
So-called "core" prices, which exclude food and energy, rose 0.2 percent for the third straight month.
Over the past 12 months ending in May, consumer prices rose 1.7 percent, much less than the pace for the 12 months that ended in April. Core prices have risen 2.3 percent in the past year, the same as for the 12 months ending in March and April. That's close to the Fed's 2 percent target for inflation.
Some economists said the slowdown in overall price increases makes it more likely the Fed will unveil some new step to boost the still-weak economy when it meets next week. If inflation were threatening to accelerate, Fed policymakers might feel compelled to raise interest rates or take other steps to fight rising prices.
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