Thursday, January 17, 2013

Inflation Quiets Down


According to figures released yesterday by the Labor Department, prices were flat in December. That meant that we ended the year with an annual inflation rate of 1.7 percent. In 2011, by contrast, the core inflation rate averaged 3.0 percent.

What accounts for the difference? In 2012 as a whole, energy prices rose by 0.5 percent, whereas they had increased by a disquieting 6.6 percent in 2011. The increase in the cost of food also slowed: Food prices rose by 1.8 percent in 2012, after rising by 4.7 percent in 2011.

All those recent figures are in line with the long-term trends at this point. Adding in the results from 2012, consumer prices showed an average annual increase of 2.4 percent over the past decade.

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