U.S. Consumer Prices Drop for First Time in a Year
By Michelle Jamrisko Sep 17, 2014 10:02 AM ET
The cost of living in the U.S. unexpectedly dropped in August for the first time in more than a year, showing inflation still is falling short of the Federal Reserve’s goal as policy makers meet.
The consumer-price index declined 0.2 percent, the first decrease since April 2013, a Labor Department report showed today in Washington. The median forecast of 83 economists surveyed by Bloomberg called for unchanged. Excluding volatile food and fuel, the so-called core measure was unchanged, the first time it failed to increase in almost four years.
A drop in energy costs and muted global growth are helping contain inflation. Subdued price increases have allowed Fed officials, who conclude two days of meetings today, to keep interest rates at record lows even as they plan to end their unprecedented monthly asset purchase program in October.
“Inflation is certainly benign,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who correctly forecast the drop in prices. “Inflation is not a front-burner issue” for Fed policy makers. “The doves have the high ground on this one,” he said, referring to central bankers who are less concerned about inflation. “They are not going to do anything with rates for a long time.”
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http://www.bloomberg.com/news/2014-09-17/consumer-prices-in-u-s-decrease-for-first-time-in-over-a-year.html
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