Economic Watch: Consumer Prices Remain Fairly Stable
October 30, 2013
At least there is one thing that’s not a worry when it comes to the American economy…inflation.
The U.S. Labor Department’s Consumer Price Index increased 0.2% in September from the month before. The hike follows a 0.1% increase in August. Higher fuel, electricity and other energy costs rose 0.8%, making up about half the overall September increase.
When the volatile food and energy sectors are removed, the September increase was just 0.1% for the second consecutive month, amounting to a 1.7% increase over the past 12 months.
Over the past year consumer prices have increased 1.2%, down from the annual increase of 1.5% as of August and is the smallest 12 month gain since April.
Service costs rose 0.3% in September and 0.2% excluding energy costs. Housing costs rose 0.3% while food and beverage prices and other goods and services costs were all unchanged for the month, despite a 0.1% rise in tobacco. Transportation costs rose 0.4%, medical care prices rose 0.3% and education and communications costs rose 0.1%, thanks to a 0.4% increase in personal computer prices. Commodities costs rose 0.1% in September, down 0.7% year-over-year.
On the weaker side, recreation prices fell 0.1% and apparel prices dropped 0.5%.
“The Federal Reserve’s fear of inflation remains sidelined amid waning price pressures keeping the annual growth rate well below the Fed’s threshold of 2.5%,” said Lindsey M. Piegza,
managing director and chief economist at the investment firm Sterne Agee.