You paid less for gasoline in April, and that led overall inflation lower for the second month in a row.
The Consumer Price Index, a key measure of inflation, fell 0.4% in April, according to the Labor Department. Compared to a year earlier, prices are up only 1.1%, a level of inflation that's considered rather low.
Falling gas prices were the main driver for the broader decline for the second month in a row, the Labor Department noted.
The average price for a gallon of unleaded gas fell by about 13 cents in April, ending the month at $3.51, according to AAA.
On one hand, lower prices at the pump can act "like a tax cut for consumers, offsetting some of the payroll tax hike," said Jim O'Sullivan, chief economist of High Frequency Economics. Consequently, tame inflation can boost consumer spending.
That said, low inflation can also be a sign of weak economic growth.
Gasoline makes up a large part of the CPI, but economists often like to strip out both energy and food to get a better read on the underlying economy.
That measure, called core CPI, rose 0.1% in April and showed prices were up 1.7% over a year ago, the lowest level since June 2011.
Airfares declined 0.7%, hospital services dropped 0.7% and clothing prices fell 0.3% in April.
Low inflation has already sparked some concerns among Federal Reserve officials, like St. Louis Federal Reserve President James Bullard, for example. Over the long-run, the Fed aims to keep inflation around 2% a year, and a level below that gives the central bank more leeway to continue its controversial stimulus policy, buying $85 billion a month in Treasuries and mortgage-backed securities.
"With inflation dropping to a two-and-a-half year low and labor markets still soft, the Fed is well-positioned to keep the monetary spigots open in support of the economy," said Jim Baird, partner and chief investment officer for Plante Moran Financial Advisors, in a note.
An alternate measure of inflation, often preferred by the Federal Reserve, shows core inflation was only 1.1% year-over-year in March. The last time initial readings showed core inflation was that low was in the summer of 2010, just before the Fed launched QE2.
The average price for a Thanksgiving dinner fell this year in several states, including Arizona, Indiana, Missouri, Virginia and Wisconsin.
And nationwide, the average price for a dinner for 10 people, rose only 28 cents or 0.6%, the smallest yearly increase since the recession in 2009.
So much for inflation.
It costs about $49.48 to feed a family of 10 with turkey and all the fixings this year, according to an informal survey MOREAnnalyn Kurtz - Nov 19, 2012 9:41 AM ET
Are Americans feeling more miserable than they were four years ago? According to the so-called "misery index," they're not -- a fact that boosts President Obama's chances of winning re-election.
The misery index combines the unemployment rate and the annual inflation rate and has accurately predicted the outcome of nine of the last 12 presidential elections, according to economists at Deutsche Bank.
When it rises, it's considered a sign of a weaker MOREAnnalyn Kurtz - Oct 17, 2012 12:08 PM ET
By now, you have probably heard of the "feud" taking place between Federal Reserve chairman Ben Bernanke and Nobel-prize winning New York Times economic columnist Paul Krugman. And if you haven't, what the heck are you doing reading this blog?
Anyway, here's the lowdown in case you aren't up to speed. Krugman took Bernanke to task in a Sunday NYT magazine piece, criticizing Bernanke for not doing enough to tackle the MOREPaul R. La Monica - Apr 26, 2012 3:27 PM ET
Here's more good news for the recovery: 47 states are predicted to see their economies strengthen over the next six months, according to a report issued by the Philadelphia Fed Tuesday.
Among them, West Virginia has the strongest prospects, likely due to a boost from natural gas drilling in the Marcellus Shale. The state also wasn't hit hard by the housing boom and bust, and has had far fewer government layoffs than other MOREAnnalyn Kurtz - Apr 3, 2012 4:04 PM ET
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