There was a .5 percent drop in consumer prices for October. The same things occurred in the month of September. This trend suggests that declining energy prices and a slowing economy is containing inflation. The primary factor driving the prices index was given to energy prices, from fuel price to the gas bill. The drop assisted in validating the Federal Reserve to cease in raising interest rates since June. Industrial production, including the output of manufacturers, mines, and utilities, also contributed to the inflation data, contrary to what the economists expected. It is unlikely that the Federal Reserve will need to increase interest rates to keep inflation under control any time soon. Blue and white-collar’s hourly wages will reflect the price index drop as well. The is the first substantial boost for workers in years. Energy seems to be the factor driving the increase in the last year and decrease in the past few months. It may have sparked a trend in that clothing costs, the price of used cars, hotel rooms, and airline fares have also decreased.
I think this decrease is exactly what everyone deserves at this point in time. I know that the sudden increase last year was more than some people could handle. It affected everyone and it is pleasant to finally have some relief, especially during the holidays.
The New York Times, Eduardo Porter and Jeremy W. Peters Friday, November 17, 2006
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