US Inflation Under Control

US inflation has fallen of the course of July, according to official figures released today.

The Consumer Price Index, which reflects the value of a typical consumer spend, grew by just 0.1% over the month, according to the figures released by the Labor Department today.

Analysts have attributed the falling cost of fuel through the decreased price of crude oil could be a major factor in suppressing inflation, a claim that is given further weight by the core rate of inflation on the month.

The core rate of inflation, calculated without including food and fuel prices, was shown to have risen by 0.2%, showing the impact of the falling oil price on US consumer inflation.

Additionally, today’s figures reflected a fall of 1.7% in petrol at the pump, showing the knock on effect of import crude oil prices on daily life, and the dramatic impact of lowering prices on US consumer inflation.

The news was well received by the Federal Reserve today, who have chosen to maintain interest rates at 5.25% to keep inflation under control for an unusually long period of time.

Analysts have predicted that today’s figures should be sufficient to maintain interest rates at their current level for next month, after the Federal Reserve meet to determine their next step.

The Federal Reserve, the central authority responsible for setting interest rates in the US, are expected to maintain interest rates for the fourteenth consecutive month after today’s indication that inflation is under control.

However, the Federal Reserve have been criticised for their lack of intervention in markets over the last year, where interest rates have remained solid despite changing economic circumstances.

The Federal Reserve will meet at the beginning of next month to discuss interest rate policy for the coming thirty days.

Story link: US Inflation Under Control