As energy prices falling sharply, U.S. consumer prices decreased 0.1percent in August, the first decrease in nearly two years, as a slowing global economy cut energy costs and relieved some inflation pressures, the Labor Department reported Tuesday. With the decline in August CPI, the overall inflation has risen 5.4percent over the past 12 months.
The 0.1 percent drop in consumer prices in August was the first monthly decline since prices fell by 0.5 percent in October 2006, another time where energy prices took a big decline.
The cost of gasoline and other fuels have plunged, reflecting big drops in crude oil prices. Energy prices plunged by 3.1 percent in August, the biggest one-month drop since October 2006. Gasoline prices fell by 4.2 percent, natural gas slid 5.8 percent and home heating oil prices dropped by 9.6 percent.
The core consumer price index, which excludes food and energy prices, rose slight 0.2percent in August after rising 0.3percent the previous two months. On a year-over-year basis, the core inflation has risen 2.5percent over the past year, the same as in July.
The CPI report showed inflation was still hot in several sectors. Food prices continued to surge upward in August, increasing 0.6percent, resulting in 6.1percent overall increase over the past year. The hot sectors include also apparel and recreation as their prices rose 0.5percent.
2 comments:
Commodity costs are coming down, the economy is clearly weakening. It'll be less possible for consumer-goods companies to pass through commodity costs because their markets will be weaker.
American inflation is cooling off as commodities prices retreat from their summer highs. Pownce
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