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Fed official says inflation is declining

Sept. 29, 2006 at 3:31 PM

DALLAS, Sept. 29 (UPI) -- The head of the Federal Reserve Bank of Dallas says fresh data indicate U.S. inflation may be declining.

Richard Fisher said in a news release Friday that the so-called trimmed mean personal consumption expenditure inflation rate fell to 2.5 percent in August from 3.2 percent in July.

"This reduction in the trimmed mean PCE is the first encouraging sign that inflation pressures in the U.S. economy are beginning to abate," Fisher said. "And though we appear to be on the right path, we would like to see reductions in other broad inflation measures as well."

The overall annualized PCE inflation rate for August was 2.9 percent, while the inflation rate for PCE, excluding food and energy, was 2.8 percent.

The Dallas Fed calculates the trimmed mean figure every month as an alternative measure of core inflation in the price index for the Commerce Department's PCE. The trimmed mean PCE is calculated using data from the Labor Department.

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