US consumer prices flat as gas costs keep falling - KAIT Jonesboro, AR - Region 8 News, weather, sports

US consumer prices flat as gas costs keep falling

By JOSH BOAK
AP Economics Writer

WASHINGTON (AP) - U.S. consumer prices stayed flat in November, held down by falling gas prices. Inflation remains low across the broader economy, giving the Federal Reserve latitude to continue its extraordinary stimulus program.

The consumer price index was unchanged last month, after dropping 0.1 percent in October, the Labor Department said Tuesday.

Gas prices declined 1.6 percent in November to keep overall prices down. Over the past 12 months, consumer prices have risen just 1.2 percent. That's well below the Fed's 2 percent inflation target.

Excluding volatile energy and food costs, core prices rose 0.2 percent in November from October and just 1.7 percent over the past 12 months.

High unemployment and small wage increases have kept consumers from ramping up spending, making it difficult for businesses to raise prices since the Great Recession ended.

And cheaper gasoline costs in recent months have kept inflation extremely weak. Gas prices nationwide are averaging just $3.23 a gallon, according to AAA's Daily Fuel Gauge Report.

The November decline in energy costs was offset by higher prices for home rentals, hotels, airfare, and restaurant meals. Grocery prices edged up 0.1 percent last month, led by higher prices for bread, hot dogs, soup and milk.

Prices for new vehicles and clothing fell. But in a sign of potentially changing fashion styles, the price of women's dresses increased 5.7 percent during the past 12 months as the cost of women's suits dropped.

Ultra-low inflation may encourage the Fed to continue its massive bond purchases for a few more months, despite an improving job market and stronger growth.

For roughly a year, the Fed has been buying $85 billion a month in bonds to keep long-term interest rates low and encourage more borrowing and spending. The Fed has also kept its key short-term interest rate near zero since late 2008.

Fed officials meet Tuesday and Wednesday to discuss these policies, followed by a news conference by Chairman Ben Bernanke.

Critics of the bond-buying program fear it will spark higher inflation in the future.

But the inflation has yet to materialize. Moreover, a number of Fed officials say the program is needed because inflation has been too low.

A small amount of inflation can be good for the economy, because it encourages consumers and businesses to spend and invest before prices rise further. But if prices don't increase at all, consumers might pull back their spending on the expectation that goods will be cheaper in the future.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Region 8 News</span><a class="customMoreLink" href="/Global/category.asp?C=4391" target="_top">More >></a>Region 8 NewsMore>>

  • Poker run to help fire department

    Poker run to help fire department

    Saturday, July 21 2018 12:41 PM EDT2018-07-21 16:41:05 GMT
    Saturday, July 21 2018 4:17 PM EDT2018-07-21 20:17:29 GMT
    Delaplaine Volunteer Fire Department (Source: Delaplaine Volunteer Fire Department Facebook page)Delaplaine Volunteer Fire Department (Source: Delaplaine Volunteer Fire Department Facebook page)
    Delaplaine Volunteer Fire Department (Source: Delaplaine Volunteer Fire Department Facebook page)Delaplaine Volunteer Fire Department (Source: Delaplaine Volunteer Fire Department Facebook page)

    An event will seek to help an area fire department replace outdated equipment as well as providing a scholarship for a future firefighter in the community, an event organizer said. 

    An event will seek to help an area fire department replace outdated equipment as well as providing a scholarship for a future firefighter in the community, an event organizer said. 

  • Officials release Branson boat tragedy victims' names

    Officials release Branson boat tragedy victims' names

    Saturday, July 21 2018 12:17 PM EDT2018-07-21 16:17:14 GMT
    Gov. Parson and emergency response officials will gave a news briefing on the Table Rock Lake recovery efforts. (Source: KFVS)Gov. Parson and emergency response officials will gave a news briefing on the Table Rock Lake recovery efforts. (Source: KFVS)

    The four missing bodies were found on Friday morning, July 20, bringing the total death toll to 17 after a duck boat capsized on Table Rock Lake.

    The four missing bodies were found on Friday morning, July 20, bringing the total death toll to 17 after a duck boat capsized on Table Rock Lake.

  • breaking

    UPDATE: Berger now in custody in connection with Independence County shooting

    UPDATE: Berger now in custody in connection with Independence County shooting

    Monday, July 16 2018 10:54 PM EDT2018-07-17 02:54:47 GMT
    Saturday, July 21 2018 12:03 PM EDT2018-07-21 16:03:46 GMT
    Joseph Bramblett and Michelle Bramblett (Source: Independence County Sheriff's Dept./Facebook)Joseph Bramblett and Michelle Bramblett (Source: Independence County Sheriff's Dept./Facebook)

    A shooting Monday night sent one man to the hospital and Independence County sheriff's deputies on the hunt for three people.

    A shooting Monday night sent one man to the hospital and Independence County sheriff's deputies on the hunt for three people.

Powered by Frankly