Quoted – Lower energy prices leads to cheaper cost of living; inflation still in check

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The cost of living fell slightly in April, led by lower energy prices, a sign that inflation is still in check. But prices rose in the Midwest

The U.S. Bureau of Labor Statistics reported Wednesday a 0.1 percent decrease in the Consumer Price Index on a seasonally adjusted basis. The index for energy dropped 1.4 percent while food prices were essentially flat, up 0.2 percent. The core index remained stable.

“As long as unemployment continues to be stubborn, I think the Fed is going to stay on the sidelines for a while,” said Wai, who predicts flat interest rates for the year.

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Quoted – Consumer pay a little more in March, inflation not yet problem

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Consumer pay a little more in March, inflation not yet problem

Prices paid by consumers in March rose slightly, a sign that inflation has not yet become a serious problem for the U.S. economy.

The Consumer Price Index rose 0.1 percent on a seasonally adjusted basis last month, according to a Wednesday report by the U.S. Bureau of Labor Statistics.

“I think the Fed should keep interest rates low,” said Scott Testa, professor of business administration at Cabrini College. “I think to raise interest rates now would be a little premature.”

However, others think the Fed’s current policy on interest rates will be unsustainable in the future.

http://news.medill.northwestern.edu/chicago/news.aspx?id=162995

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Quoted – Rising energy prices lead to slight bump in January consumer prices

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Rising energy prices lead to slight bump in January consumer prices

“I think what you’re seeing is a natural, gradual number, nothing dramatic and nothing very surprising. It was right around what most people expected,” said Scott Testa, an economics professor at Cabrini College in Philadelphia.

As the economy climbs out of a recession and short-term interest rates remain at historic lows, much attention is being paid to indicators of inflation.

Testa said the CPI “shows that the typical consumer was not being squeezed. Seventy percent of the economy is based on consumer spending, so numbers like this, that would give consumers an advantage for spending, I think are encouraging.”

Friday’s CPI increase was minimal as compared to the 1.4 percent jump in the Producer Price Index, another inflation measure focused on prices at the wholesale level. According to Testa, the divergence isn’t very significant.

“I’d be more concerned if both numbers are dramatically up. I take it with a grain of salt when looking at one specific set of numbers over a short period of time.”

http://news.medill.northwestern.edu/chicago/news.aspx?id=157639

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