US inflation in largest annual fall since 1955
The US Labor Department has announced today that US consumer prices remained unchanged in April – in line with expectations.
However, on an annualised basis, inflation fell 0.7% on April last year – the steepest decline in 54 years.
Core prices, excluding energy and food, rose by 0.3% in April compared with March, which was more than expected, this was boosted by a sharp increase in federal tobacco taxes on 1 April.
There have been fears that the recession in the US may lead to a prolonged period of falling prices – known as deflation.
A short period of deflation (where prices fall rather than increase) could be a serious threat to the economy because it deters consumers and businesses from spending in expectation of falling prices
Paul Ashworth, of Capital Economics, said: “We still expect core inflation to moderate sharply in the second half of this year and through 2010.”
Visited 2019 times, 1 so far today

Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.