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Inflation and Prices

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The September inflation statistics showed neither a continuation of the disinflation seen for much of the summer nor the significant reacceleration of inflation that seemed to be occurring last spring. The Consumer Price Index (CPI) rose 1.9% during the month, a slower pace than its sharp rise of 4.8% in the second quarter but faster than its slight 0.6% uptick in the third. Surging costs of petroleum and other imports have made it difficult to identify a distinct inflation trend. The cost of crude oil has continued to rise at an alarming pace, recently breaking $55 a barrel for West Texas intermediate crude—an increase of 80% since the beginning of the year. Meanwhile, the dollar devaluation that began in late 2002 has been putting upward pressure on nonpetroleum import prices, which, at around 3%, show the highest growth rate in almost a decade.

Suggested citation: "Inflation and Prices," Federal Reserve Bank of Cleveland, Economic Trends, no. 04-11, pp. 02-03, 11.01.2004.

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