U.S. consumer prices
excluding energy and food rose 0.2 percent in October, a sign that
inflation remains in check.
The 0.3 percent rise in all consumer prices, the most widely
followed gauge of U.S. inflation, followed a 0.2 percent increase
in September, the Labor Department said. Energy prices rose 1.9
percent, the most since April, as cooler weather boosted demand
for natural gas and as concern rose that tension with Iraq may
disrupt oil supplies.
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The tepid recovery is holding down inflation, which may give
Federal Reserve policy makers room to keep interest rates at a 41-
year low. Companies such as Dell Computer Corp. and Food Lion Inc.
grocery stores are lowering prices to boost sales. Slow economic
growth also led to a decline in both exports and imports, the
Commerce Department reported.
“I don’t think inflation is a problem,” John Silvia, chief
economist at Wachovia Corp. in Charlotte, said. “There is an
absence of pricing power in highly competitive markets.”
Bloomberg News
