Consumer Price Index Remains Flat in April as Price of Energy Commodities Falls

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Written by David Rosnick   
Tuesday, 15 May 2012 10:00

The Consumer Price Index remained flat in April as energy prices showed large declines, falling 2.6 percent, according to the latest Bureau of Labor Statistics' reports on the consumer price, U.S. import/export price and producer price indexes. Excluding volatile food and energy prices, the core index of consumer prices rose 0.2 percent in the month and at a 1.9 percent annualized rate over the last three months.

With core consumer price inflation both low and stable and with little hint of price pressures coming from earlier stages of production, there can be little reason for inflationary fears. An increase in the rate of inflation would actually be welcome economic news, since additional deflation of nominal debts and lowering of real interest rates actually would help spur demand in the economy and induce additional hiring. This would be particularly important to the United States if the deflationary crisis in Europe should cause both a fall in demand for American exports compounded by a sharp rise in the dollar.

For a more in-depth analysis, check out the latest Prices Byte.

Tags: economy | prices