Thursday, November 21, 2013

US Inflation at Four-Year Low on Falling Gasoline Prices

A big drop in gasoline prices brought the US inflation rate for October, as measured by year-on-year change in the consumer price index, to just 0.95 percent, its lowest level in four years. The y-o-y inflation rate for the core CPI, which excludes food and energy, was 1.69 percent. As the following chart shows, trends for both the all-items and core CPI have turned downward over the past two years.

Year-on-year data give a good picture of medium-term trends, but it is also worth looking at monthly data, which tell us what is happening right now. The latest monthly data reveal not just a slowing of inflation, but an actual fall in the price level for October. As the next chart shows, the seasonally adjusted CPI decreased at a .71 percent annual rate in October. Without seasonal adjustment, the CPI fell even more sharply—an annual rate of decrease of 3.05 percent. >>>Read more

Follow this link to view or download a classroom-ready slideshow with charts of the latest inflation data

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