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| Version 2 | Version 3 |
|---|---|
| US inflation falls still further | US inflation falls still further |
| (about 1 hour later) | |
| US consumer prices dropped by a record amount in November as petrol prices and other energy costs continued to fall. | US consumer prices dropped by a record amount in November as petrol prices and other energy costs continued to fall. |
| The Consumer Price Index (CPI) dropped by 1.7% in November, according to the US Labor Department, following a decline of 1% in October. | The Consumer Price Index (CPI) dropped by 1.7% in November, according to the US Labor Department, following a decline of 1% in October. |
| October and November's falls were the two biggest since monthly data first started being recorded in 1947. | October and November's falls were the two biggest since monthly data first started being recorded in 1947. |
| And the annual rate of inflation was just 1.1% in November, down from 3.7% the previous month. | |
| Energy prices fell 17% last month, double October's 8.6% dip. | Energy prices fell 17% last month, double October's 8.6% dip. |
| Oil price falls | Oil price falls |
| These latest big declines reflect the recession in the US and will raise the pressure on the Federal Reserve - the central bank - to act decisively to guard against a debilitating bout of deflation. | These latest big declines reflect the recession in the US and will raise the pressure on the Federal Reserve - the central bank - to act decisively to guard against a debilitating bout of deflation. |
| Paul Ashworth, at Capital Economics, said: "The headline inflation rate is now guaranteed to fall deep into negative territory next year." | Paul Ashworth, at Capital Economics, said: "The headline inflation rate is now guaranteed to fall deep into negative territory next year." |
| "If this was just a decline in the relative price of commodities then it would be a little easier to live with," he said. | "If this was just a decline in the relative price of commodities then it would be a little easier to live with," he said. |
| "However, the rapid moderation in core inflation suggests that there is a real risk of a sustained decline in the general price level. In short, the US economy could slip into a deflation within the next 12 months." | "However, the rapid moderation in core inflation suggests that there is a real risk of a sustained decline in the general price level. In short, the US economy could slip into a deflation within the next 12 months." |
| Much of the headline inflation fall was taken up by the continuing drop in crude oil prices, reflected in the further fall in the energy index. | Much of the headline inflation fall was taken up by the continuing drop in crude oil prices, reflected in the further fall in the energy index. |
| Energy prices are now 32.4% below their peak in July earlier this year. | Energy prices are now 32.4% below their peak in July earlier this year. |
| The gasoline index fell 29.5% in November and petrol prices are now 47% below their July peak. | The gasoline index fell 29.5% in November and petrol prices are now 47% below their July peak. |
| Food prices increased 0.2% in November, following a 0.3% rise in October. | Food prices increased 0.2% in November, following a 0.3% rise in October. |
| Excluding food and energy, core prices were virtually unchanged in November, after declining 0.1% in October, and are up 2.0% since November 2007. | Excluding food and energy, core prices were virtually unchanged in November, after declining 0.1% in October, and are up 2.0% since November 2007. |
| Later on Tuesday the Federal Reserve is widely expected to cut its key federal funds rate, already at a low of 1%, by another half percentage point in an effort to keep the recession from worsening. | Later on Tuesday the Federal Reserve is widely expected to cut its key federal funds rate, already at a low of 1%, by another half percentage point in an effort to keep the recession from worsening. |