November 16, 2005


Inflation moderates as gas prices fall (MARTIN CRUTSINGER, 11/16/05, AP)

Inflation pressures bombarding consumers moderated significantly last month as energy prices retreated after hitting record highs in September.

The Labor Department reported that consumer prices edged up just 0.2 percent in October, which was the best showing in four months. In September, consumer prices had soared by 1.2 percent, the biggest one-month increase in 25 years.

The slowdown in price pressures reflected a 0.2 percent drop in energy costs, a significant change from the record 12 percent increase in energy prices in September, a surge that had reflected widespread shutdowns of refineries and oil platforms along the Gulf Coast in the wake of hurricanes Katrina and Rita.

Mr. Greenspan could take considerable pressure off of Mr. bernanke by starting to cut rates himself before he leaves.

Posted by Orrin Judd at November 16, 2005 10:28 AM

The M3 numbers (which won't be around for much longer) show that July through October they are up 11.5%... That's massive, and while rates are one way of ginning up consumption, so is outright 'flation of the money supply.

CPI, incidentally, is so dressed up for politics, its not a very good indicator.

Posted by: J C Ernharth at November 16, 2005 1:00 PM

Yes, government inflation figures always wildly overstate inflation, but that allows the Fed to be as hawkish as the ownnership class requires.

Posted by: oj at November 16, 2005 1:09 PM