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May 1998, Vol. 121, No. 5
Consumer inflation in 1997 at 11-year low
Consumer Price Index for All Urban Consumers (CPI-U) All Items for the
U.S. city average increased 1.7 percent in 1997, down
from a 3.3-percent advance during the prior year.1 The 1997 rise was the smallest annual increase
since the 1.1-percent advance in 1986, when oil prices
collapsed. A combination of declining energy prices and
moderating food inflation contributed to last years
relatively low consumer inflation. Lower prices for
consumer energy followed falling world crude oil prices,
as oil supplies outpaced usual demand, and as demand for
oil turned out to be weaker than expected. Decelerating
food inflation accompanied decreasing prices for animal
feed and wheat.
- The CPI-U excluding food and energy prices (often called
the core CPI-U)
increased 2.2 percent, the smallest calendar-year rise in
32 years. Decreasing commodities prices across a wide
variety of items, including new and used cars and
housefurnishings, contributed to the slowdown in
inflation in 1997. Commodities prices, subject to greater
global competition than those for services, rose just 0.2
percent. Within commodities, prices for durable goods
decreased 1.5 percent; nondurable goods increased 0.8
percent. Services fees, which increased 2.8 percent in
1997, decelerated as well, although not nearly as much as
did commodities prices. (See table 1.)
This excerpt is from an article published in
the May 1998 issue of the Monthly Labor Review. The full
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1 Annual percent changes are December to December, unless
Related BLS programs
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in 1995. June 1996.
- Consumer prices
in 1994. June 1995.
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- Consumer price rise slows further in 1992. May 1993.
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- Consumer price slows in first half of 1991. October 1991.
- Consumer prices rise sharply in 1990. May 1991.
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