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Post by bot on Nov 20, 2013 15:44:19 GMT -5
WASHINGTON (MarketWatch) - U.S. consumer prices fell slightly in October largely because of a decline in energy prices, while the cost of housing also slowed, the government said Wednesday. Consumer prices have risen an unadjusted 1% over the past 12 months, the smallest increase since the fall of 2009, the governmetn said. The consumer price index dropped by a seasonally adjusted 0.1% in October to mark the first decline since April, the Labor Department reported. Energy prices sank 1.7%, led by a 2.9% decrease in gasoline. Food prices rose 0.1%, the same as in September. The core CPI, which excludes volatile food and energy costs, rose 0.1%. Economists surveyed by MarketWatch had expected the overall CPI to be unchanged and the core rate to rise by 0.2%. The core rate has climbed a somewhat faster but still soft 1.7% in the past 12 months. The decline in the CPI mainly reflects a pullback in oil prices, but it also shows that underlying inflationary pressure in the economy is nearly absent. Low inflation has enabled the Federal Reserve to maintain a huge economic-stimulus program and some central bankers might see the lack of pricing power as evidence that they should continue their policy for many months to come. Meanwhile, real or inflation-adjusted hourly wages rose by 0.2% in October to $10.31. Real wages are up just 1.3% over the past 12 months, one reason why the U.S. economy is still struggling to break out of a pattern of slow growth. There's not enough consumer demand to generate faster growth.
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