US consumer prices fall further in June

| July 20, 2010 | 0 Comments

Official data from the Labor Department has today revealed that US consumer prices fell for the third consecutive month in June, by 0.1% on a monthly basis.

The fall was attributed to declines in energy prices, which were down 2.9%, food prices remained flat.

The fall in June followed declines of 0.1% and 0.2% in April and May respectively.

However, last month’s fall has raised fears of deflation in the world’s largest economy and will add to pressure on the Federal Reserve to take action to push inflation into positive territory.

Deflation (where prices fall rather than increase) can be a serious threat to an economy because it deters consumers and businesses from spending in expectation of falling prices.

The figures come on the same day that the Commerce Department revealed US housing starts dived 5% last month - far more than expected and raises further concerns for the already fragile housing market.

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