Consumer Prices in U.S. Rise at Slowest Pace in Five Months
By Victoria Stilwell Aug 19, 2014 8:47 AM ET
The cost of living in the U.S. climbed in July at the slowest pace in five months, indicating price pressures remain limited even as the economy picks up.
The consumer price index increased 0.1 percent, matching the median forecast of 80 economists surveyed by Bloomberg, after rising 0.3 percent the prior month, a Labor Department report showed today in Washington. Stripping out volatile food and fuel, the so-called core measure also climbed 0.1 percent, less than projected.
Inflation continues to run below the Federal Reserve’s target as sluggish global demand limits companies’ ability to charge customers more. Restrained increases give the central bank’s policy makers room to keep interest rates low well after the projected end of their bond-buying program in October.
“Some of the inflation concerns that you were hearing back in June will probably ease off a little bit,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York and the second-best forecaster of consumer prices over the last two years, according to Bloomberg data. “It takes some pressure off the Fed to speed up rate normalization. There had been a lot of rhetoric about the Fed being behind the curve on inflation, and this probably takes some wind out of that.”
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http://www.bloomberg.com/news/2014-08-19/consumer-prices-in-u-s-increase-at-slowest-pace-in-five-months.html