Thursday, June 18, 2009

U.S. Consumer Costs Decline

The living cost in the U.S.A. fell over the last 12 months by the most in sixty years, easing concern that government efforts to revive the economy will lead to a certain outbreak of inflation. The analysts expect it will encourage trade.

The consumer price index slid by 1.3 percent in the year finished in May, the most since 1950. Price index increased only 0.1 percent last month, less than it was expected, with the same position in April 2009.

No rise in sale gains is one reason companies are finding with problem how to pass increases in costs of fuel on to consumers. Higher gasoline price will probably restrain Americans who spend a lot at a time on the background of economy showing positive signs.

Michel Moran, chief economist at Daiwa Securities America Inc. in New York says that inflation is not an serious issue. She says:“There are huge amounts of slack in the economy and demand is quite soft, so it’s difficult to see how inflation can pick up for the balance of the year.”
Energy costs rised by 0.2 percent in May, as a 3.1 percent rise in the price of gasoline was resulted by declines in oil and natural gas.

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