Consumer Prices in U.S. Decline for First Time in Six Months
By Shobhana Chandra and Victoria Stilwell - Nov 20, 2013
The cost of living in the U.S. declined in October for the first time in six months, showing inflation remains below the Federal Reserve’s goal.
The consumer-price index dropped 0.1 percent, reflecting cheaper energy, clothing and new cars, after a 0.2 percent gain the prior month, a Labor Department report showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg called for no change. Excluding volatile food and fuel, the so-called core measure rose 0.1 percent.
Companies from Wal-Mart Stores Inc. (WMT) to Macy’s Inc. (M) are holding the line on prices to attract more customers heading into the holiday-shopping period. Limited inflation also gives Fed officials the flexibility to maintain their $85 billion-a-month bond purchase program to stimulate the economy.
“Inflation is a distant concern at this time,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “It gives the Fed room for its continued quantitative-easing efforts.”
Estimates for the consumer-price index ranged from a drop of 0.2 percent to a gain of 0.2 percent, according to the Bloomberg survey. Economists projected the core gauge would rise 0.1 percent.
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http://www.bloomberg.com/news/2013-11-20/consumer-prices-in-u-s-decline-for-first-time-in-six-months.html
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