US consumer prices remain static

In the month of September, US consumer prices remained static, even as the cost of living has soared over the past 12 months.

With rising inflation and the fear of the credit crunch, both consumer and business confidence has fallen. However last month was a real milestone as the decrease in the cost of fuel costs, new car prices and airline fares indicated that the economy is slowing, which has helped to drive down inflation.

So far this year consumer prices have increased by 4.9 per cent, although wholesale prices have fallen by 0.4 percent which in turn have driven prices down for the end consumer.

Economists however have indicated that moderation inflation will free up monetary policymakers so that they cut interest rates further which will in turn continue to drive down inflation as the economy begins to pick up.

As a response to the hardship being faced by many consumers, many US companies are having cut prices drastically.

Stability in the Labour market is also important in the current economic climate and figures released today by the Labour Department reveal that initial jobless claims fell last week and that benefit applicants had actually fallen by 16,000 to 461,000.

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