Business

Gas prices drop, easing inflation woes

InternAdmin Contributor
Font Size:

WASHINGTON (AP) — Consumers paid less for gas, cars and computers last month, as overall prices dropped for the first time since June. Inflation is easing after prices rose sharply this spring.

The Labor Department said Wednesday that the Consumer Price Index dropped 0.1 percent in October. A steep drop in gas prices led the decline. Food prices rose, but at the slowest pace this year.

Excluding volatile food and energy costs, so-called “core” prices rose 0.1 percent. The cost of renting an apartment rose, as did prices for health care products and services.

But new car prices dropped by the most in almost two years, and airline fares and hotel costs declined.

Many economists believe inflation is peaking after climbing steadily this year. Slower inflation could give more momentum to those at the Federal Reserve who believe the central bank should do more to try to lower high unemployment.

A small amount of inflation can be good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.

Consumer prices have increased 3.5 percent in the 12 months ending in October. Core prices have risen 2.1 percent in that stretch.

Rising oil prices sent the average cost of gas to nearly $4 a gallon in May. The cost of milk, eggs, chicken, and beef rose sharply because of higher prices for corn and other grains used as animal feed.

Higher prices for cotton also drove clothing costs up for four straight months, though prices fell in September. Car prices rose after Japan’s March 11 earthquake disrupted supply chains and slowed auto production, which led to a shortage of popular models from Toyota, Honda and other Japanese carmakers.

Slower inflation could boost consumer spending, which accounts for 70 percent of the economy. The government said Tuesday that retail sales rose 0.5 percent in October. Americans spent more on trucks, electronics and building supplies. That suggests the economy continued to grow at a modest pace in the October-December quarter.

Still, consumers might not be able to sustain their spending growth if unemployment remains high and pay raises meager. And Europe may be on the brink of a recession, which could further slow U.S. growth next year.

Federal Reserve policymakers are projecting lower inflation next year. That would give the central bank more latitude to hold down interest rates, and potentially take other steps to stimulate the economy. The Fed has kept the benchmark short-term rate it controls at nearly zero for almost three years. If there were signs that inflation was increasing, the Fed would likely raise rates.

The central bank said two weeks ago that it expects inflation to fall from about 2.8 percent this year to roughly 1.7 percent next year. That’s in the Fed’s preferred range of about 1.7 percent to 2 percent.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel