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 NOV. 19, 2006
Lower energy prices could signal end to inflation scare
A report produced by the U.S. Labor Department shows that the consumer price index fell to a seasonally -adjusted level of 0.5% in the month of October. This figure has offset the reported decline in September of this year. On the whole, prices have increased 1.3% over last year. This marks the smallest increase since June of 2002.


Gasoline prices dropped 11.1% from the month of September. Annually, prices have decreased 18.3%. The cost of Natural gas went down 7.7%, 24% below the 2005 prices.

Housing related expenses, which includes tenant rents and what is referred to by the Fed as "Owner's equivalent rent" (mortgage costs) were up 0.4% from September.

Many analysts say that these declines in prices signal that the recent inflation scare is behind us. Some economists predict that if this trend continues that we can expect the Federal Reserve to cut interest rates in early 2007.

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