U.S. Consumer Prices Rise First Time In Four Months, Easing Deflation Risk

August 13, 2010

in News

U.S. Consumer Prices Rise First Time In Four Months, Easing Deflation Risk

The cost of living in the U.S. climbed in July for the first time in four months, pointing to a stabilization that may ease concern a slowdown in growth will spur deflation. The consumer-price index increased 0.3 percent, the most in a year and exceeding the 0.2 percent gain projected by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. A gauge excluding volatile food and fuel costs, the so-called core rate, increased 0.1 percent, as projected. The report showed rents, the biggest component in CPI, increased for a second month, and the cost of clothing, used cars and tobacco climbed, diminishing the risk of a protracted drop in prices that would hurt the economy. Economists say the lack of inflation gives Federal Reserve policy makers scope to leave the benchmark interest rate near zero into 2011 to help invigorate the economy. [Read this article]

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