U.S. consumer prices remained unchanged in July but annual inflation registered its largest decline since 1950, the Labor Department reported Friday.
The latest data helped ease concerns of rising inflation due to government spending and the Federal Reserves monetary policy of injecting cash into the US economy.
"It [inflation] could be a very large long-run problem," Mickey Levy, Bank of America, chief economist, was quoted on NYTimes.com. "But in the near-term, it’s not a problem at all."
The Consumer Price Index, which measures inflation pressures at the consumer level, remained unchanged in July due largely to Continue reading US Consumer prices unchanged, biggest annual inflation drop since 1950
US consumer prices remained unchanged in July, temporarily easing concerns that government spending and the Fed monetary policy would ignite inflation.
The monthly released Labor Department Consumer Price Index (CPI) showed year-over-year inflation actually declined 2.1%, cut down by sharply lower energy costs as compared to last July when gasoline prices were over $4 a gallon.
"In the months ahead, we expect U.S. consumer prices to soften further, and headline consumer price inflation to remain in negative territory (at least through to some time in the fall), before beginning to creep above zero as the expected economic recovery gathers traction," Millan Mulraine, economics strategist with TD Securities, in a research note, was quoted on MarketWatch.
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For an in depth look at July consumer prices, read US Consumer prices unchanged, biggest annual inflation drop since 1950.