Cheaper gas keeps US consumer prices flat

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Associated Press

Posted on July 17, 2012 at 8:05 AM

WASHINGTON (AP) — Consumer prices were unchanged in June, held down by cheaper gas. Outside the volatile food and energy categories, inflation was mild.

The Labor Department says gas prices fell in June by a seasonally adjusted 2 percent, the third straight decline. Food prices edged up 0.2 percent after a flat reading in May.

Outside the volatile food and energy categories, so-called "core" prices rose 0.2 percent last month. It was the fourth straight increase of that size.

The flat reading on overall prices comes after the consumer price index fell 0.3 percent in May and was unchanged in April.

Mild price increases leave consumers with more money to spend, which spurs more growth. Lower inflation also gives the Federal Reserve room to launch new programs intended to boost the economy.

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