Inflation coolsThe Labor Department said today that the Consumer Price Index was
unchanged last month. Economists had expected an increase of
0.1%. Prices rose 3.4% in the 12 months through November. That
is off from the 3-year high of 3.9% clocked in September, and
Friday's report backs the view that the spike in inflation is
subsiding. However, some of the data in the report could give
pause to policymakers still concerned about inflation. Outside
food and energy, prices climbed 0.2%. These so-called core
prices rose 2.2% in the 12 months through November, up from 2.1%
in October. Prices for food rose 0.1% during November. Within
the core index, prices for apparel jumped 0.6%. But dragging
down the overall index, gasoline fell 2.4% and prices for new
vehicles were down 0.3%. Economists and investors see inflation slowing over the coming
months, which could help convince the Federal Reserve to do more
to bring down the country's 8.6% unemployment rate. Most
economists have said the Fed's next meeting on Jan. 24-25 would
be the more likely occasion for any new moves to bring down
borrowing costs and help growth. The US central bank has held
overnight interest rates near zero since December 2008 and has
bought $2.3 trillion in government and mortgage-related bonds in
a further attempt to stimulate a robust recovery.
unchanged last month. Economists had expected an increase of
0.1%. Prices rose 3.4% in the 12 months through November. That
is off from the 3-year high of 3.9% clocked in September, and
Friday's report backs the view that the spike in inflation is
subsiding. However, some of the data in the report could give
pause to policymakers still concerned about inflation. Outside
food and energy, prices climbed 0.2%. These so-called core
prices rose 2.2% in the 12 months through November, up from 2.1%
in October. Prices for food rose 0.1% during November. Within
the core index, prices for apparel jumped 0.6%. But dragging
down the overall index, gasoline fell 2.4% and prices for new
vehicles were down 0.3%. Economists and investors see inflation slowing over the coming
months, which could help convince the Federal Reserve to do more
to bring down the country's 8.6% unemployment rate. Most
economists have said the Fed's next meeting on Jan. 24-25 would
be the more likely occasion for any new moves to bring down
borrowing costs and help growth. The US central bank has held
overnight interest rates near zero since December 2008 and has
bought $2.3 trillion in government and mortgage-related bonds in
a further attempt to stimulate a robust recovery.
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