U.S. consumer prices unexpectedly
declined in July, underscoring the Federal Reserve’s view that
accelerating inflation earlier this year may prove temporary.
Industrial production rose and home construction increased more
than forecast.
The 0.1 percent decrease in the consumer price index
compares with a 0.3 percent increase in June, the Labor
Department said in Washington. The core rate, which excludes food
and energy, rose 0.1 percent for a second month.
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“The inflation figures give the Federal Reserve reassurance
their measured pace is appropriate,” said John Ryding, chief
U.S. economist at Bear Stearns & Co. in New York.
The inflation report suggests companies are keeping a lid on
prices to help boost sales, economists said. At the same time,
the increases in homebuilding and business spending on equipment
show the economy may speed up after the weakest quarter for
economic growth in more than a year.
Bloomberg News
