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Montevideo, January 20th 2022 - 07:42 UTC

 

 

US consumer prices fell 0.1% in October and in the last twelve months was 1%

Wednesday, November 20th 2013 - 20:49 UTC
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The Federal Reserve target is to keep inflation under 2%  The Federal Reserve target is to keep inflation under 2%

US consumer prices fell 0.1% in October as petrol prices dropped, the US Labor Department has said. Petrol prices fell 2.9%, the biggest drop since April. The cost of new cars, clothes and healthcare also fell. The decrease meant that annual inflation in the 12 months to October was just 1%.

 So-called core prices, excluding energy and food costs which vary more, were up 0.1% in October and increased 1.7% in the last 12 months.

On Tuesday, Federal Reserve chairman Ben Bernanke said the US central bank would maintain its liberal monetary policy for as long as needed and that could mean holding interest rates near zero until “well after” US unemployment falls to below 6.5%.

Analysts believe his comments make it more likely that the Fed will continue its 85bn dollars bond-buying program, aimed at stimulating the economy. Critics of the program fear it could lead to higher inflation in the future.

Figures also released on Wednesday showed US retail sales up 0.4% in October, from flat in September, the US Commerce Department said. In particular, sales of cars, clothes and furniture were behind the rise. Economists say that lower petrol prices could mean households spend more during the crucial festive season.

In the US, consumer spending accounts for 70% of economic activity.

Also on Wednesday, the Federal Reserve was due to release minutes of a policymakers' meeting, but analysts say they do not expect to see many clues about whether the central bank is planning to reduce - or taper - its stimulus measures.

Wednesday's 1% rise in annual inflation was below the US central bank's target of keeping inflation under 2%. Over the last four years, inflation in the US has been mild, with prices kept down by a slow recovery from the financial crisis.

Stubbornly high unemployment, which is currently at 7.3%, and only modest wage increases have led many retailers to put off raising prices.

Categories: Economy, Politics, United States.

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