Cheaper gas lowers US consumer prices - New York News

Cheaper gas lowers US consumer prices

Posted: Updated:

WASHINGTON (AP) -- A steep fall in gas costs pushed down a measure of U.S. consumer prices last month, keeping inflation mild.

The seasonally adjusted consumer price index dropped 0.3 percent in November from October, the Labor Department said Friday. Gas prices fell 7.4 percent, the steepest drop in nearly four years. That offset a 0.2 percent rise in food prices.

In the past year, consumer prices have risen 1.8 percent, down from October's 12-month increase of 2.2 percent.

Excluding volatile food and gas, prices ticked up 0.1 percent in November and have risen 1.9 percent in the past year. Higher rents, airline fares and new cars pushed up core prices. The cost of clothing and used cars fell.

High unemployment and slow wage growth have made businesses reluctant to raise prices. Many worry higher prices could drive away customers. That's helped keep inflation mild.

Modest inflation leaves consumers with more money to spend, which can boost economic growth. Lower inflation also makes it easier for the Fed to continue with its efforts to rekindle the economy. If the Fed were worried that prices are rising too fast, it might have to raise interest rates.

The Fed said Wednesday that it now plans to keep the short-term interest rate it controls at nearly zero until the unemployment rate falls to at least 6.5 percent and inflation isn't expected to top 2.5 percent in the next two years.

It was the clearest sign yet that they will keep rates super-low even after unemployment falls further and the economy picks up.

Unemployment was 7.7 percent last month and the Fed projects it will stay above 6.5 percent until late 2015. The Fed also projects inflation will stay at or below 2 percent for the next three years.

The Fed also said it would continue purchasing $85 billion in Treasury bonds and mortgage-backed securities each month in an effort to push down longer-term interest rates.

  • Your MoneyMore>>

  • Future of money

    Future of money

    Wednesday, April 16 2014 10:36 PM EDT2014-04-17 02:36:39 GMT
    These days, when you check out of a grocery store, your toughest choice might be cash or credit.  But in a few years, there may be no need to carry dollar bills, credit cards, or stacks of cash.  It might sound like the stuff of science fiction but futurist and social scientist Heather Schlegel says it's not.
    These days, when you check out of a grocery store, your toughest choice might be cash or credit.  But in a few years, there may be no need to carry dollar bills, credit cards, or stacks of cash.  It might sound like the stuff of science fiction but futurist and social scientist Heather Schlegel says it's not.
  • IRS considers taxing work freebies like food

    IRS considers taxing work freebies like food

    Wednesday, April 16 2014 9:11 PM EDT2014-04-17 01:11:44 GMT
    In competitive job markets like Silicon Valley, companies are doing everything they can to entice the best and brightest -- offering freebies that have become the stuff of legend.Employee perks like free food at lavish cafeterias, laundry and even yoga are not unheard of.  But the taxman could soon crack down.  The IRS reportedly is looking at these perks and seeing if these companies need to start paying up for the free stuff they offer employees.
    In competitive job markets like Silicon Valley, companies are doing everything they can to entice the best and brightest -- offering freebies that have become the stuff of legend.Employee perks like free food at lavish cafeterias, laundry and even yoga are not unheard of.  But the taxman could soon crack down.  The IRS reportedly is looking at these perks and seeing if these companies need to start paying up for the free stuff they offer employees.
  • Social streaming video from your iPhone with YEVVO

    Social streaming video from your iPhone with YEVVO

    Wednesday, April 16 2014 8:46 AM EDT2014-04-16 12:46:01 GMT
    We met YEVVO's 26-year-old co-founder and CEO, Ben Rubin, on a rainy day in Madison Square Park. Among the four of us (Ben, me, my photographer, and the representative from Ben's PR firm), we had four smartphones and the free app Rubin created."What if you were going live during this interview and then somebody [online] started asking questions and then [that somebody] actually helped to create the content?" Rubin asked.
    We met YEVVO's 26-year-old co-founder and CEO, Ben Rubin, on a rainy day in Madison Square Park. Among the four of us (Ben, me, my photographer, and the representative from Ben's PR firm), we had four smartphones and the free app Rubin created."What if you were going live during this interview and then somebody [online] started asking questions and then [that somebody] actually helped to create the content?" Rubin asked.
  • Local NewsLocal NewsMore>>

  • Baby found in teen's shopping bag called homicide

    Baby found in teen's shopping bag called homicide

    Wednesday, April 16 2014 11:07 PM EDT2014-04-17 03:07:27 GMT
    The New York City medical examiner has ruled that the death of a baby found in a teenager's shopping bag was a homicide.
    The New York City medical examiner has ruled that the death of a baby found in a teenager's shopping bag was a homicide.
  • Chelsea Clinton: I might run for office

    Chelsea Clinton: I might run for office

    Wednesday, April 16 2014 8:36 PM EDT2014-04-17 00:36:50 GMT
    Chelsea Clinton says she might run for office someday - if she becomes dissatisfied with the job her elected representatives are doing.
    Chelsea Clinton says she might run for office someday - if she becomes dissatisfied with the job her elected representatives are doing.
  • NJ mom charged with trying to kill her 3 teens

    NJ mom charged with trying to kill her 3 children

    Wednesday, April 16 2014 8:25 PM EDT2014-04-17 00:25:35 GMT
    A southern New Jersey woman is in custody on charges she tried to kill her three children by driving her car into the Delaware River.
    A southern New Jersey woman is in custody on charges she tried to kill her three children by driving her car into the Delaware River.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices