How a touch of inflation could boost the economy

Americans generally view rising prices as something to fear. But right now, a little inflation may be just what the economy needs.

Consumer prices rose 1.2 percent over the 12 months that ended in August, the Labor Department said Friday, and only 0.9 percent when volatile prices for food and energy are excluded. That is well below the range of 1.5 to 2 percent sought by the Federal Reserve.

The low inflation numbers reflect the reluctance of businesses to raise prices amid weak demand for their products and the inability of most workers to get raises at a time of high unemployment.

Read Full Article from Washington Post

- Posted: 2010-09-17 21:54:44

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