US Core Inflation Held Stable Yoy And The Fed Will Be In No Hurry To Raise Interest Rates
US headline inflation fell by a smaller magnitude of 0.1% mom in June, after a decline of 0.2% in May. This was the third consecutive month of decline, pointing to easing price pressures, on the back of a smaller drop in gasoline prices, which fell by 4.5% mom in June, compared with -5.2% in May and -2.4% in April. Excluding energy prices, inflation held stable at 0.1% mom during the month, the same rate of increase as in the previous month. Excluding food and energy prices, the core inflation rate, on the other hand, inched up by 0.2% mom in June, marginally higher than +0.1% in May and after remaining unchanged in the previous two months. This was attributed to a pick-up in the prices of apparel and the costs of healthcare as well as recreation. These were, however, mitigated by a decline in the costs of housing. Prices of food & beverages and the costs of education, on the other hand, remained stable during the month. Yoy, the headline inflation eased to 1.1% in June, from +2.0% in May and the peak of +2.7% in December. The core inflation rate, on the other hand, held stable for the third consecutive month at +0.9% yoy in June, the same rate of increase as in the previous two months and compared with the peak of +1.8% in December. The readings suggest that price pressures remain benign in the US, in tandem with the US Federal Reserve’s assessment that substantial resource slack would continue to restrain cost pressures and inflation is likely to be subdued for some time.
The World Economy... - 19/7/2010
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