US Officially Joins Deflation Club in January
Wow! I didn't think I would see that happen for a LONG time.
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For the first time since the end of the Great Recession, US consumers paid less for goods and services than a year earlier, a government report showed on Thursday.
The CPI fell 0.1% in January from a year earlier, the Department of Labor said on Thursday. The figure comes in line with market expectations of a 0.1% drop in the year-over-year change.
Core inflation, measured as CPI excluding energy and food costs, remained positive at 1.6% year-on-year, albeit below the Federal Reserve's (Fed) 2% target.
Fed bets
Global markets are asking whether US central bank policymakers would change their views on the bank raising interest rates in mid-2015.The Fed targets 2% inflation and it tracks an index that is running even lower than the CPI.
Low inflation could still make the Fed cautious, which has kept its short-term interest rate near zero since December 2008.
While inflation is trending lower, job growth has shifted into a higher gear and the pace of slack absorption in the economy has accelerated in recent months.
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