|
Some of the price declines are being passed on to consumers. Economists forecast that the consumer price index fell 0.1 percent in April. If accurate, that would lower the annual pace of inflation, which was just 1.5 percent in March. The government will report on April consumer prices Thursday. The Fed has said it plans to keep the short-term interest rate it controls at a record low near zero until the unemployment rate falls below 6.5 percent, provided inflation remains in check. Unemployment in April dropped to a four-year low of 7.5 percent. The Fed is also purchasing $85 billion a month in bonds to keep longer-term interest rates down. That's intended to encourage more borrowing and spending, which drives economic growth. The Fed says it will continue to buy bonds until the job market improves substantially. Many economists expect the Fed will begin to taper those purchases by the end of the year, particularly if hiring stays healthy. But too-low inflation could cause them to continue. A little inflation can be good for the economy because it encourages consumers and businesses to spend more before prices rise.
[Associated
Press;
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries
Community |
Perspectives
|
Law & Courts |
Leisure Time
|
Spiritual Life |
Health & Fitness |
Teen Scene
Calendar
|
Letters to the Editor