U.S. Consumer Prices Rise Less Than Forecast; Annual Drop Most in 60 Years

[Purveyor]

Source: Bloomberg

By Courtney Schlisserman

June 17 (Bloomberg) -- The cost of living in the U.S. rose less than forecast in May, culminating in the biggest 12-month drop in prices in almost 60 years.

The consumer price index increased 0.1 percent after no change a month earlier, the Labor Department said today in Washington. In the 12 months ended in May, costs dropped 1.3 percent, the biggest decline since 1950.

Higher commodity prices, including gasoline, will probably restrain Americans’ discretionary spending at a time when the economy is showing signs of stabilizing. The lack of sustained gains in sales is one reason companies are finding it difficult to pass increasing costs on to customers.

“There’s not pricing power in this otherwise very weak economy,” said Richard DeKaser, chief economist at Woodley Park Research in Washington. “Inflation is going to remain very weak and over the next year will continue to weaken given the tremendous amount of slack in the economy.”

Economists forecast consumer prices rose 0.3 percent, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from a 0.1 percent decrease to a gain of 0.6 percent.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aCW4ePZCxlIg

[Indydem]

1. Bullshit.

You can't print $700 billion and throw it down the rat hole after the filty banksters and not have masive inflation.

Where the fuck did this DeKaser get his econmics degree, CrackerJack?

[Tempest]

3. Actually...

The annual GNP of the U.S. in real dollars is $11.7 trillion.

$700 billion is not going to make as big an impact on prices as you seem to believe.

In fact, it's barely a ripple in a very big pond.

[Psephos]

10. Pricing is driven at the margin. Econ 101.

We saw a glaring demonstration of that with oil prices last year.

The $700 billion is a sideshow, anyway. The trillions that have been created by the Fed are the real issue. How many trillions?

No one actually knows.

[ixion]

2. drop in prices? Then how come everything costs considerably more

than it cost last year?

This is Bullpuckey, IMO.

[Tempest]

5. Not everything costs more

http://www.bls.gov/news.release/cpi.nr0.htm

Food prices are down.
Housing is down.
Apparel prices are down.
Transportation costs are down.

[ixion]

6. I have seen no decrease in my weekly grocery bill

and that's what I base my opinion on, among other things.

[aquart]

7. Food prices are down? WHERE? In what category?

They're still going up where I am.

[NickB79]

9. I've been seeing much better deals on dairy, eggs and meat lately

Milk is under $3/gal, whereas it was $4/gal last year.

Eggs are 99 cents/dozen, whereas last summer they were $1.50.

I just picked up chicken drumsticks on sale for $1/lb last week, and frozen chicken breasts are down below $2/lb again, regular price.

The drop in food prices isn't massive, but there are some better deals out there than this time last year.

[aquart]

11. The non-sale price of chicken went up here.

[brentspeak]

8. I haven't seen lower food prices

Where?

[durablend]

12. I'll echo the others...

"Food prices down"

Where? Not here. Prices on fruits and vegetables are just as high (if not higher) than they were before. Supermarkets may be paying less but they're not passing those savings on. If anything I'm expecting the howls of "fuel prices going up so we need to raise prices" to start any time now.

[Journeyman]

4. And yet, my health insurance premiums went UP over 20% just last month. . .

independent business owner, private insurance, corporately screwed. . .

[durablend]

13. They're supposed to go up again next year

Double digit percent