Deflation deflated

14 January 2011 By Agnes Crane

Key inflation numbers remain benign, despite some underlying price pressures. Meanwhile, though consumers spent a bit less than expected in December, they re hardly putting off purchases. Overall, recent data suggest concerns about pernicious deflation can be put to rest.

This content is for Subscribers only

Context News

The U.S. consumer price index, a leading gauge of inflation, rose 0.5 percent in December, according to the Department of Labor. Gasoline accounted for 80 percent of the rise. The core CPI, which strips out volatile food and energy prices, rose 0.1 percent, with shelter costs accounting for 60 percent of the rise. The 2010 annual increase in the core CPI was 0.8 percent.

U.S. retail sales rose 0.6 percent in December, below expectations for a 0.8 percent increase. The 2010 annual increase in retail sales was 6.6 percent.

A preliminary reading of consumer sentiment in January was less rosy. The Thomson Reuters/University of Michigan survey index fell to 72.7 from 74.5 in December. Oneyear inflation expectations rose to 3.3 percent from 3.0 percent, according to the survey. [ID: nNLLECE7T5]

Email a friend

Please complete the form below.

Required fields *