Economic Article

ECONOMIC ARTICLE 4

EconomicArticle

Thearticle, U.S.inflation muted in September as energy costs drop,has been written by Lucia Mutikani. This article presents the ideathat United States consumer prices increased marginally in September,which painted a weak inflation view, which was supposed to give theFederal reserve sufficient room for keeping interest rates low forsome time. The Labor Department indicated that its Consumer PriceIndex (CPI) edged up 0.1% in August as an increase in shelter andfood costs offset a decrease in energy prices (Mutikani, 2014).According to the author, the senior person at the American Institutefor Economic research in Great Barrington had an opinion that theongoing inflation weakness will offer the Fed freedom of taking arestrained method of tightening monetary conditions. The articleprovides that the CPI had declined 0.2 % in August and economistsprojected a flat reading in September. For the 12 months throughSeptember, the CPI increased 1.7% after an equal gain in August(Mutikani, 2014).

Accordingto the author, inflation waned in the recent months after goingfaster in the second quarter, with a stronger dollar and slowereconomic growth in China and the dampening import prices in the eurozone. Besides, the slow wage growth also helped in keeping a cap onprices. Economists expected consumer prices to remain steady inAugust and United states Treasury debt prices fell after the databecame released, while the dollar increased against a basket ofcurrencies.

Theauthor further argues that the September report indicated thatunderlying inflation pressures also remained muted, although therewas an increase in medical care ad shelter costs. Energy pricestripped for a third consecutive month in September, where gasolinecosts dropped 0.1% after falling 4.1% in August. Airline pricesdeclined for a third consecutive month and prices for apparel andmotor vehicles remained unchanged. However, prices for trucks andused cars dropped for the fifth consecutive month (Mutikani, 2014).

References

Mutikani,L. (2014, October 22nd).U.S. inflation muted in September as energy costs drop: Reuters.