Inflation the United States is cooling off as shown by a report today, confirming the Federal Reserve’s view from its policy meeting earlier in the week.
The Consumer price Index (CPI) was flat for the month of November, due to a drop in energy costs. Oil prices have been declining recently, helping offset a rise in food prices.
On a yearly basis, CPI moved up to 3.4 percent versus a year ago in November but down from October 2010.
The core CPI which excludes food and energy prices ticked up 0.2 percent in November despite expectations for it to remain unchanged at 0.1 percent.
The overall figures were satisfactory enough to ease inflation concerns. That would give the Fed more room to implement measures to bring down the unemployment rate next year and stimulate the economy. The Fed did not take any steps to change policy in its latest meeting this week but left the door open for more options in 2012.
The dollar’s knee jerk reaction to the news was to jump against most counterparts, trimming recent losses from the past couple of days.
The greenback is up against the euro, sterling, aussie and Canadian dollar.