Consumer prices were flat last month as retreating costs for gasoline, clothes and new cars helped to offset rising prices for food, medical...
WASHINGTON — Consumer prices were flat last month as retreating costs for gasoline, clothes and new cars helped to offset rising prices for food, medical care and other things.
The new reading on the Consumer Price Index (CPI), the government’s most closely watched inflation barometer, came after prices actually dipped by 0.1 percent in August, the Labor Department reported Thursday.
Those two months, however, offered Americans a rare reprieve. Consumer prices have marched upward most of the year, spiking by 1.1 percent in June.
And that means paychecks aren’t stretching as far, straining consumers. The prospects that consumers will retrench further would spell more trouble for the already ailing economy.
Most Read Business Stories
- 6 Dr. Seuss books won't be published for racist images
- Frontier cancels flight, citing maskless passengers
- Biden vows enough vaccine for all US adults by end of May
- Amazon sued by Black cloud-computing manager over alleged racial discrimination and sexual harassment
- The penthouse atop Smith Tower is on the rental market for the first time
Other economic reports showed that filings for unemployment benefits remained elevated and big industry production plunged by the most since late 1974, largely reflecting fallout from hurricanes Gustav and Ike.
In the inflation report, when energy and food products are stripped out, “core” prices inched up by just 0.1 percent in September, an improvement from a 0.2 percent advance in August.
The latest showing on inflation was better than economists expected. They were forecasting a 0.1 percent increase in overall prices and a 0.2 percent rise minus energy and food.
Paychecks continued to shrink. Weekly wages dropped by 2.5 percent last month compared with a year ago, the 12th straight period in which wages have been down.
So far this year, consumer prices have risen at an annualized pace of 4.5 percent, faster than the 4.1 percent increase for all of 2007. Core prices in the first nine months of this year have increased at a pace of 2.4 percent, matching the rise for all of last year.
The higher inflation seen for most of this year, however, does mean that Social Security paychecks will be fatter next year. Social Security benefits will go up 5.8 percent next year, the largest increase in more than a quarter century.
Another Labor Department report showed the number of new people signing up for unemployment benefits last week dropped. Even with the decline, new claims totaled 461,000 — a figure associated with deep troubles in employment conditions.
Indeed, the four-week moving average of jobless claims is at a seven-year high. And, the number of people continuing to collect jobless benefits rose to 3.7 million, the highest since late June 2003, when the labor market was still struggling to get back on its feet after the 2001 recession.