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US inflation down on cheaper fuel | US inflation down on cheaper fuel |
(41 minutes later) | |
US inflation fell slightly in August, dipping by 0.1% after a sharp drop in energy prices, officials figures show. | |
However, core US consumer prices, which excludes food and energy costs, rose by 0.2%, in line with market expectations. | |
Separate data showed the number of new US homes being built sank to the lowest annual rate for 12 years, while permits for new construction also dipped. | |
The data came a day after US interest rates were cut from 5.25% to 4.75%, a larger cut than most had predicted. | |
In making its rate cut decision, the Fed acknowledged that inflationary pressures remained, but said it needed to avert an economic downturn prompted by woes in the housing market. | |
Housing slowdown | |
Analysts said that Wednesday's data suggested the Fed's decision had been the right one as it showed that the housing market had weakened while inflation had stayed under control. | |
Energy costs have now fallen for three straight months, however bills have risen in September with oil prices hitting new records. | Energy costs have now fallen for three straight months, however bills have risen in September with oil prices hitting new records. |
The Labor Department figures showed that clothing prices fell 0.5% and the volatile hotel component dropped back 0.6%. | |
In separate data from the Commerce Department, the number of new US homes being built fell 2.6% last month to an annual pace of 1.331 million units, the lowest rate for 12 years. | |
Building permit requests - seen as an indicator of future construction plans - hit a low not seen since mid-1995. |
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