An unexpected decline in U.S. consumer prices in October continues a disturbing trend across the developed world. Though central banks’ hyper-aggressive monetary policies were meant to stimulate a lot of growth and a little inflation, they’ve been falling short on both counts.
U.S. prices slipped 0.1 per cent, seasonally adjusted, from their September level, the first such drop in six months. On an annual basis, inflation fell to a four-year low of 1 per cent, from 1.2 per cent the previous month. This is well below the Fed’s target rate of 2 per cent – a figure which most central banks regard as ideal, and which some economists even consider a tad low for a struggling economy trying to crawl back to sustained growth.