U.S. Consumer Prices Rise Less Than Expected


Consumer prices in the U.S. rose 0.1 percent in July, the smallest gain in eight months. This level should give Fed policy makers room to maneuver in case the collapse in the Stock market gets worst.

The 18-month long housing slump and record fuel expenses have weakened consumer spending, forcing retailers such as WalMart Stores Inc. to cut prices to drum up business. A letup in inflation would give Federal Reserve policy makers room to maneuver should the drop in stock prices and credit restrictions cause the economy to stumble.

Yields of U.S. Treasury securities fell following the reports. The rate on the benchmark 10-year note was 4.70 percent at 9:39 a.m. in New York, compared with 4.73 percent late yesterday.

Economists forecast consumer prices would rise 0.1 percent, according to the median of 78 projections in a Bloomberg News survey. Estimates ranged from a decline of 0.3 percent to a 0.4 percent gain.


TradingEconomics.com, Bloomberg
8/15/2007 7:01:28 AM