U.S. consumer prices in January posted their biggest drop since 2008 as gasoline prices continued to tumble, which could give a cautious Federal Reserve ammunition to keep interest rates low a bit longer.
The Labor Department said its Consumer Price Index fell 0.7 percent last month, the largest decline since December 2008, after slipping 0.3 percent in December. It was the third straight month of decline in the index.
In the 12 months through January, the CPI fell 0.1 percent, the first decline since October 2009 and a sharp deceleration from November’s 0.8 percent rise.
Economists polled by Reuters had forecast the CPI falling 0.6 percent last month and slipping 0.1 percent from a year ago.
Separately, the Commerce Department said a gauge of business investment plans rebounded in January after four straight months of declines.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending intentions, increased 0.6 percent last month after a revised 0.7 percent fall in December.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.