Consumer Price Index Reflects a Flat Inflation

Cheryl Lock
Posted

consumer spendingThere’s some good news for all you shoppers out there—turns out U.S. consumer prices were flat last month, a sign that the rate of inflation is, thankfully, in check.

According to the latest reports, the consumer price index rose only 1.6% in the 12 months that ended this past January. Those numbers are down from the 2.9% rate of one year ago.

This is good news for a sagging and slow economy, since it leaves consumers with more dollars in their wallets to put back into shops and businesses.

Believe it or not, even food and gas prices rose only slightly last year, at 1.8% and 1.7%, respectively. (Of course gas prices have been rising again recently, but at least some companies are doing what they can to make up for the increase.)

According to DailyFinance, job gains and steady-but-modest economic growth have kept businesses reluctant to raise their prices for fear of losing customers, which has in turn helped keep inflation mild.

A steady inflation rate also helps the Federal Reserve with its efforts to speed up the economy. Had prices been rising fast, the Fed may have been forced to increase interest rates. Instead, they’ve kept the benchmark interest rate around zero for more than four years  now.

Tell us: Did you notice that prices kept relatively steady over last year? Does that make you more likely to spend more?

  • http://mydebtucation.blogspot.com/ Mario

    I noticed it more in the low rates that checking and savings accounts offer. I understand that health care and energy prices didn’t stay flat through that time, but neither are things I use a lot of