Jul 18, 2011

Inflation Falls: Is the Economy Saved or Doomed?

Inflation in June fell for the first time in a more than a year. The Consumer Price Index (CPI), which is the government's most widely watched gauge of what the things average Americans buy cost, fell 0.2% last month. The drop was mostly driven by a fall in gas prices, which were down nearly 7% alone in June. The question is whether this is a good sign for the recovery, or another sign that we are headed for a double dip. Are we at the end of the soft patch, or the beginning of a worse patch?

Inflation Falls: Is the Economy Saved or Doomed?

The Consumer Price Index for All Urban Consumers (CPI-U) decreased
 0.2 percent in June on a seasonally adjusted basis, the U.S. Bureau
 of Labor Statistics reported today. Over the last 12 months, the all
 items index increased 3.6 percent before seasonal adjustment.

In contrast, the index for all items less food and
increased 0.3 percent for the second consecutive month.

Consumer Price Index - June 2011