Lower gasoline prices dampen U.S. consumer inflation

[Omaha Steve]

Source: Reuters

BY LUCIA MUTIKANI

(Reuters) - U.S. consumer prices fell over the past year for the first time since 2009 as gasoline prices continued to tumble, which could allow a cautious Federal Reserve more room to hold off on raising interest rates.

Other data on Thursday showed a rebound in business investment spending plans and a steadily firming labor market, suggesting the move into deflation territory would be brief. In addition, gasoline prices have been rising in recent weeks.

"We believe the Fed will wait until September before achieving liftoff on interest rates and, even then, the process of normalization will move at a glacial pace," said Diane Swonk, chief economist at Mesirow Financial in Chicago.

The Labor Department said its Consumer Price Index fell 0.1 percent in the 12 months through January, the first decline since October 2009 and a sharp deceleration from December's 0.8 percent rise.

FULL story at link.


Read more: http://www.reuters.com/article/2015/02/26/us-usa-economy-idUSKBN0LU1J220150226

[niyad]

1. the gas prices have been rising in my area for the last three weeks. almost back to last fall.

[William769]

2. WTF are they talking about?

"as gasoline prices continued to tumble". Our gas has jumped 46 cents in the past 3 weeks!

[muriel_volestrangler]

5. What does the word 'January' mean to you?

Do you know how many weeks it has been since January? Do you understand that 'continued' is the past tense?

[William769]

8. Love your snarky sarcasm.

I bet you never misread read anything.

[muriel_volestrangler]

9. It's normal for published figures to refer to the month before

so I'd always assume that something published in February referred to up to the end of January, if not before.

But I do like your riposte.

[olddots]

3. 60 cent hike in a month in LA

Are we as confused as the puppet masters ? As long as we use fossil fuel we will stay foolish .

[HappyMe]

4. Gas prices have started to go back up.

It was nice while it lasted.

[BlueCaliDem]

6. Gasoline prices rising fast now. Find the cheapest gas prices in your neighborhood

by City and State using this nifty little gasoline prices site: GasBuddy.

I just renewed my CostCo card last week and now get the lowest price around my home, and CostCo is, consequently, right down the street from my house, too! http://www.sanbernardinogasprices.com/Fontana/index.aspx

[Thor_MN]

11. Same station jumped from $2.279 this morning to $2.499 this afternoon.

Had to fill this morning.

[Man from Pickens]

7. That's odd

isn't "food and fuel" excluded from the CPI? If so, how can gas prices affect the number?

[muriel_volestrangler]

10. That's the "core CPI", which is given later in the article

The so-called core CPI, which strips out food and energy costs, rose 0.2 percent last month after December's 0.1 percent pain. Economists, however, believe the effects of lower energy prices and a strong dollar still have to work their way through to the core CPI, which could mean tame readings ahead.

(That 2nd sentence meaning, I think, that even when you take direct energy costs out of the CPI, energy still affects prices indirectly - the cost of delivery to a store goes down a bit with gas, for instance).