US inflation slows in July

[demoleft]

Source: Financial Times

US inflation cooled last month, giving the Federal Reserve more scope to cut interest rates in response to the crisis in credit markets.

The slowdown in underlying inflation will make it easier for Ben Bernanke, Fed chairman, to justify cutting rates, which can stimulate price rises and encourage investors to take risks in the hope the Fed will step in if things turn sour.

...
The fresh government figures showed that core inflation – excluding food and energy costs – rose 0.1 per cent in July, less than the 0.2 per cent gain projected by economists and recorded the previous month.

...
There were also positive signs for the economy as consumer spending rose more than forecast in July, a sign that households were adding to economic growth before the credit crunch.



Read more: http://www.ft.com/cms/s/0/7a88bb7e-57ce-11dc-8c65-0000779fd2ac.html

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Looks like Europe: our economies are learning to be glad to survive!

[Zenlitened]

1. Well, what a happy coincidence.

US inflation cooled last month, giving the Federal Reserve more scope to cut interest rates in response to the crisis in credit markets.

Right when the Bernanke needs an excuse -- any excuse -- to give in to the angry mob's demand for a rate cut... well, along comes a report on the "latest economic figures" that gives him just the cover he needs.

He can put the "inflation is a concern because the economy is doing so great!" routine on hold for a bit -- a political fiction that's not really convincing anyone at the moment, anyway -- and "reluctantly" trim rates all in the name of wise and compassionate stewardship of our fiscal well-being.

:tinfoil:

:D

[spotbird]

2. Lies and damn lies

Who believes this shit anymore? Certainly no one who eats, clothes their children or air conditions their home.

[tom_paine]

3. Exactly. Bushies lie like Soviets. Bushie Numbers are certainly spun, probably

fabricated, in places they fell they can get away with it.

[Tempest]

4. The core rate is a useless measure

Everyone buys food and energy so their costs are much higher.

[PSPS]

5. "excluding food and energy costs" = meaningless spin

[tapper]

6. Housing costs figured into 'core rate'?

I've been wondering, since I first heard this news, if housing costs are included in the 'core' rate. With the median price of housing heading downward, if that's included in 'core', seems to me that could affect the figures...?

[Trillo]

7. We'll find out in a year if they're lying.

One thing that really buggers me about the Fed is how they love some inflation (not too much), but deflation sets in and they're all about nipping it in the bud and lowering interest rates.

In other words, they've rigged the game to insure we're constantly subjected to some market inflation, and the politicians have rigged the CPI to weight downward movements heavier than upward movements. Cumulatively, such shenanigans have a big effect on elderly folks (who cares about them, anyway, their pensions are welfare, they don't work, don'tcha know /snark)

I'd love to see some politician support repairing the CPI changes over the last 30 years so that it correctly accounts for inflation and deflation. Pigs can fly, too, so can horse's asses, but birds, they live in the ground, don'tcha know.