Even though gas prices keep rising, businesses haven’t been sticking customers with price hikes. In fact, the bear economy has staggered the Consumer Price Index once again, with the index rising only 0.1 percent in May. The miniscule, less-than-expected increase, following a flat April, means that prices were 1.3 percent lower in May than they were a year ago — the largest year-over-year drop since 1950.
Bloomberg on the sorta-good news:
“Inflation is not an issue,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. “There are huge amounts of slack in the economy and demand is quite soft, so it’s difficult to see how inflation can pick up for the balance of the year.”
Another report showed the U.S. deficit in its current account narrowed in the first quarter to the lowest level since 2001. The gap, the broadest measure of international flows because it includes trade, investment income and government transfers, fell to $101.5 billion from $154.9 billion in the last three months of 2008, the Commerce Department reported.
For reasons the lower costs may not be so great, refer back to our explanation back in April, when things cost 99.9 percent as much as they do today.
U.S. Economy: Consumer Costs Fall Most in Six Decades [Bloomberg]
(Photo: Christina T)