Consumer prices fell unexpectedly in October by 0.1%, in part due to falling gas prices, according to the Bureau of Labor Statistics. The Consumer Price Index has increased 1% over the last 12 months, the smallest such increase since October 2009.
Core CPI, which does not account for energy or food prices, rose 0.1%:
This level of inflation means that the Fed is likely to put off the tapering of asset purchases in its quantitative easing program at least through early 2014, according to Reuters. The Fed has an inflation target of 2%, but inflation has been consistently below that level. Reuters has more details:
Economists polled by Reuters had forecast consumer prices unchanged last month and increasing 1.0 percent from a year ago.
The Labor Department said as a result of a 16-day government shutdown last month, the sample of prices used to calculate the October index was about 75 percent of the amount usually used in the CPI.
Here’s how inflation in the various CPI components, less food and energy, has fared since 2008:
Here’s more on the danger’s of too-low inflation in America and globally.