lower gas prices
WASHINGTON -- U.S. consumer prices were flat in June as the cost of gasoline dropped, offering some relief for cash-strapped Americans and scope for the Federal Reserve to ease monetary policy further to help the faltering recovery.

The Consumer Price Index fell 0.3% in May and June's reading was in line with economists expectations.

Stripping out food and energy, inflation pressures were also benign. Core CPI rose 0.2% for a fourth straight month, the Labor Department said on Tuesday.

The data was the latest sign of tepid domestic demand and provided the Fed with some room to maneuver as it weighs options to aid the economic recovery, which has slowed significantly in recent months.

Minutes of the U.S. central bank's June meeting released last week showed the Fed was open to buying more Treasury bonds to spur the economy, but the recovery would probably need to weaken further for broad consensus among policymakers.

The economy grew at a 1.9% annual rate in the first quarter and estimates for the April-June period are converging around a 1.5% pace.

Fed Chairman Ben Bernanke could shed more light on the outlook for monetary policy when he gives his semi-annual testimony before lawmakers at 10 a.m.

Last month, overall inflation was held back by a 2% drop in gasoline prices, offsetting a 0.2% rise in food prices. Gasoline prices at the pump have declined about 53 cents from their peak around $4 a gallon in April, easing some of the strain on household budgets amid stagnant wages.

Overall consumer prices rose 1.7% year-over-year in June after increasing by the same margin in May.

Core consumer prices were last month lifted by apparel prices, which rose 0.5%, advancing for a fourth consecutive month. New motor vehicle prices gained 0.2% after increasing by the same margin in May.

Prices for used cars and trucks were flat after three straight months of strong gains.

The cost of medical care rose at its fastest pace since September 2010, reflecting big increases for hospital and doctors' services. There were also gains in the cost of tobacco and recreation.

However, the price of airline tickets fell 2.5%. Housing costs were muted, with owners' equivalent rent advancing 0.1% in June after gaining by the same margin in May.

In the 12 months to June, core CPI increased 2.2% after rising 2.3% in May.

This measure has rebounded from a record low of 0.6% in October and the Fed, which last month expanded its efforts to stimulate the economy, aims for inflation of 2%.


Increase your money and finance knowledge from home

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

Add a Comment

*0 / 3000 Character Maximum

38 Comments

Filter by:
billcarol88

Gas prices here in central Illinois just went up 19 cents. I sure am wondering where the prices are falling. Also, please stop saying obama is from illinois he is either for Hawaii or Kenya take you pick but he is NOT a born in Illinois president. He lived up in the state of Chicago all good down state Illionis people wish they would make Chicago a state of it own.

July 19 2012 at 11:06 AM Report abuse rate up rate down Reply
lesterwms1

Gas prices in my went up 12 cent just last night. How can you keep sliding prices is going down, what planet you you living on !

July 18 2012 at 2:24 PM Report abuse rate up rate down Reply
Robert & Lisa

Oil prices are starting to rise again. If Obama is re-elected, expect $10 gal. gas within the next four years but I'll bet wages won't be going up.

July 17 2012 at 7:17 PM Report abuse +1 rate up rate down Reply
chris36m

the price per barrel of oil is at the same level as it was 2-3 yr's ago when gas was $2.50 a gallon there is over a $1 per gallon "RAPE" charge, we all need to stand up and stop this bullshit of overpriced gas

July 17 2012 at 5:06 PM Report abuse rate up rate down Reply
chris36m

Falling Gas?, prices are back to where they were 4 month's, short lived drop....bunch of BS

July 17 2012 at 5:04 PM Report abuse rate up rate down Reply
Matthew

Gas around my home has increased .20 per gallon. Is that called falling now?

July 17 2012 at 3:59 PM Report abuse +1 rate up rate down Reply
ectullis

Gas prices where I live have actually increased. Penn Hills Pa., about 12 miles east of PGH.

July 17 2012 at 3:10 PM Report abuse rate up rate down Reply
tmoschetti

Okay, so when gas prices were rising rapidly, and some of us were wondering why we were being told there was no inflation because food and energy were NOT calculated in the inflation numbers!

Whatever is necessary to prop up the economically illiterate community organizer, is what we'll continue to get from the thorougly corrupted, terminally biased Obama "Information Minsitry!"

When the reported the disastrous 80,000 jobs for June, they NEGLECTED to tell you that one third of the jobs were temporary jobs, and that 85,000 people went on government disability.

At this point in the Reagan recovery of the Carter disaster, the equivalent of 448,000 jobs were being created monthly, and GDP was northof 6%, not the 1.9% we see now!

July 17 2012 at 3:08 PM Report abuse rate up rate down Reply
troutbum21

Gas prices in my area have risen over twenty cents a gallon in the last month. Somebody needs to go back to school and take a math refresher course.

July 17 2012 at 2:53 PM Report abuse +1 rate up rate down Reply
jshedl10411

If you have not noticed, the "Speculators" have pushed the price of crude up $10/barrel in the last two weeks. The Govt needs to star regulating the Oil Speculating Market. What is to stop the Saudi's from taking one billion dollars and distrubiting it amoung ten individuals to go and speculate the price of crude higher? Hypothetical but very possible. They are in a win win situation. Compare the charts for crude vs. gasoline pump prices over the last seven months. We are being RIPPED OFF by "Big OIL". The press no longer places a lare enphasis on "Big OIL" quarter earning reports

July 17 2012 at 2:46 PM Report abuse +2 rate up rate down Reply