Labor Department and CPI: From Not Enough Inflation to No Inflation

InflationThe Federal Reserve is due to start its two-day FOMC meeting to determine whether to taper its bond buying activities under its quantitative easing measure. If the Labor Department's report on inflation is accurate, there are no inflationary pressures for the FOMC to worry about. According to the latest release, the November Consumer Price Index (CPI) was unchanged. The core-CPI, which strips out food and energy, rose by 0.2%.

Bloomberg was calling for the reading to be flat on the headline and up 0.1% on the core rate. Dow Jones was calling for a 0.1% gain on the headline and on the core CPI readings. On a year-over-year basis, CPI rose by 1.2% on the headline reading and by 1.7% on the core reading. Both are less than the 2.0% target by the Federal Reserve.

Lower energy prices, with gasoline down 1.6%, in November are helping to mute the prices at this time, and the weak international market segment is doing some of the same. Apparel prices were lower again as well.


Filed under: Economy

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