Wednesday, November 16, 2011

US Inflation Data: Moderate October CPI Data Give Fed Room to Maneuver in Face of Euro Crisis

US inflation pressures continued to ease in October, according to the latest data from the Bureau of Labor Statistics. With the struggling US economy facing headwinds from the euro crisis, low inflation gives the Fed a welcome extra bit of room to maneuver.

The headline CPI actually fell at a 1 percent rate during October.  (All inflation rates given in this post are seasonally adjusted monthly changes stated as annual rates.)  Energy prices were the main factor driving headline inflation downward. Negative inflation is unlikely to persist, however, given that world oil prices have already pushed back over $100 a barrel this week.

Core inflation remained moderate in October, rising just slightly to a 1.7 percent annual rate. Apparel prices and prices of medical goods and services helped pull the core rate up a bit from September’s 0.6 percent, which was the low for the year. READ MORE>>>

Follow this link to view or download a classroom-ready slideshow including the latest inflation charts and analysis.

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