United States: Inflation falls for the first time in eleven months
November 16, 2011
In October, consumer prices declined a seasonally-adjusted 0.1% over the previous month, which was in line with market expectations and marked the slowest pace in four months. The subdued print was the result of lower energy prices, which dropped 2.0% month-on-month on the back of lower gasoline and natural gas prices. Owing to the subdued monthly print, annual headline inflation fell from 3.9% in September to 3.5% in October, which marked the lowest rate since April. Meanwhile, the closely monitored core inflation index, which excludes food and energy prices, rose 0.1% over the previous month, which prompted annual core inflation to inch up to 2.1%. Annual average inflation over the previous 12 months currently sits at 2.8%. In its latest forecast from November, the Federal Reserve expects PCE inflation (based on the price index for personal consumption expenditures) to average between 2.7% and 2.9% in 2011 and between 1.4% and 2.0% in 2012.