U.S. Economy: Price Increases Slow, Factories Expand

The cost of living in the U.S. rose at a slower pace while manufacturing expanded in the New York and Philadelphia regions, indicating the recovery from recession isn’t stoking inflation.

Consumer prices rose 0.2 percent in September after a 0.4 percent gain in August, the Labor Department said today. Reports from the Federal Reserve Banks of New York and Philadelphia showed factories increased production this month.

The consumer-price report backs Fed policy makers who argue that interest rates should be kept near zero for a long time to nurture a recovery from the worst recession since the 1930s. Economists project the jobless rate will exceed 10 percent by early 2010, even as a report today showed claims for unemployment benefits declined last week.

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- Posted: 2009-10-15 20:13:28

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