Low Inflation

By Isaac Cohen*

The two main indicators monitored by the central bank have behaved differently, during the nine years of moderate, but sustained US economic reactivation. While unemployment, at 4.3 percent in May, has emphatically decreased toward full employment, inflation has been more reticent, at 1.4 percent in May it remained under the 2 percent objective set by the Federal Reserve. According to the Commerce Department, even without the more volatile prices of food and energy, the personal consumer expenditure price index, preferred by the Federal Reserve, also registered 1.4 percent in May, the lowest since December 2015. In fact, for the first time in five years, this index exceeded the 2 Low inflation percent target only last February.

Federal Reserve Chairwoman Janet Yellen attributed the low inflation rate in May to “transitory factors,” such as price cuts in wireless services. However, other more permanent factors may also be relevant, such as lower commodity prices. For instance, last week oil prices retreated to $45 per barrel, while copper prices are expected to fall to around $5,000 a metric ton, during this year’s second half, mainly because of a slowdown in the Chinese economy. Additionally, unfulfilled campaign promises, of lower taxes, less regulation and increased infrastructure spending, are generating increased disappointment in the private sector.

*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media. Former Director, UNECLAC Washington.

About Ramón Jiménez

Ramón Jiménez, actual Managing Editor de MetroLatinoUSA. Periodista que cubre eventos de las comunidades latinas en Washington D.C., Maryland y Virginia. Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia. Galardonado en numerosas ocasiones por parte de la Asociación Nacional de Publicaciones Hispanas (NAHP) y otras organizaciones comunitarias y deportivas de la región metropolitana de esta capital. También premiado en dos ocasiones como Mejor Periodista del Año por la cobertura de la comunidad salvadoreña; premios otorgados por la Oficina de Asuntos Latinos del Alcalde de Washington (OLA) y otras organizaciones. Ha sido miembro del jurado calificador en diferentes concursos literarios, de belleza y talento en la región metropolitana. Ha visitado zonas de desastre en Nicaragua, Honduras y El Salvador e invitado a esos países por organizaciones que asisten a personas de escasos recursos económicos. Antes trabajó en otros medios de prensa de Virginia y Washington, D.C., incluyendo reportajes para una agencia noticiosa mundial.

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