US prices fall 0.1% in October as petrol costs drop

November 20, 2013•1 Minutes
RTC Director RTC Director

US consumer prices fell 0.1% in October as petrol prices dropped, the US Labor Department has said.

Petrol prices fell 2.9%, the biggest drop since April. The cost of new cars, clothes and healthcare also fell.

The decrease meant that annual inflation in the 12 months to October was just 1%.

So-called core prices, excluding energy and food costs which vary more, were up 0.1% in October and increased 1.7% in the last 12 months.

On Tuesday, Federal Reserve chairman Ben Bernanke said the US central bank would maintain its liberal monetary policy for as long as needed and that could mean holding interest rates near zero until “well after” US unemployment falls to below 6.5%.

Analysts believe his comments make it more likely that the Fed will continue its $85bn (£53bn) bond-buying programme, aimed at stimulating the economy.

Critics of the programme fear it could lead to higher inflation in the future.