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US prices fall 0.1% in October as petrol costs drop | US prices fall 0.1% in October as petrol costs drop |
(35 minutes later) | |
US consumer prices fell 0.1% in October as petrol prices dropped, the US Labor Department has said. | US consumer prices fell 0.1% in October as petrol prices dropped, the US Labor Department has said. |
Petrol prices fell 2.9%, the biggest drop since April. The cost of new cars, clothes and healthcare also fell. | Petrol prices fell 2.9%, the biggest drop since April. The cost of new cars, clothes and healthcare also fell. |
The decrease meant that annual inflation in the 12 months to October was just 1%. | The decrease meant that annual inflation in the 12 months to October was just 1%. |
So-called core prices, excluding energy and food costs which vary more, were up 0.1% in October and increased 1.7% in the last 12 months. | So-called core prices, excluding energy and food costs which vary more, were up 0.1% in October and increased 1.7% in the last 12 months. |
Analysts say the Federal Reserve is likely to continue its programme of buying $85bn (£53bn) in bonds each month in order to stimulate the economy. | Analysts say the Federal Reserve is likely to continue its programme of buying $85bn (£53bn) in bonds each month in order to stimulate the economy. |
Critics of the central bank's bond-buying programme had focused on worries that it would lead to higher inflation. | Critics of the central bank's bond-buying programme had focused on worries that it would lead to higher inflation. |
Busy festive season? | |
Figures also released on Wednesday showed US retail sales up 0.4% in October, from flat in September, the US Commerce Department said. | |
In particular, sales of cars, clothes and furniture were behind the rise. | |
Economists say that lower petrol prices could mean households spend more during the crucial festive season. | |
In the US, consumer spending accounts for 70% of economic activity. | |
Also on Wednesday, the Federal Reserve was due to release minutes of a policymakers' meeting, but analysts say they do not expect to see many clues about whether the central bank is planning to reduce - or taper - its stimulus measures. | |
Wednesday's 1% rise in annual inflation was below the US central bank's target of keeping inflation under 2%. | Wednesday's 1% rise in annual inflation was below the US central bank's target of keeping inflation under 2%. |
Over the last four years, inflation in the US has been mild, with prices kept down by a slow recovery from the financial crisis. | Over the last four years, inflation in the US has been mild, with prices kept down by a slow recovery from the financial crisis. |
Stubbornly high unemployment, which is currently at 7.3%, and only modest wage increases have led many retailers to put off raising prices. |