By Sacramento Business Journal

Consumer prices dropped for the third-consecutive month, largely because of lower energy prices, according to a closely watched government report released Friday.

The Consumer Price Index â¿¿ which tracks everything from gas to personal-care products â¿¿ dipped 0.1 percent in June, greatly easing concerns about inflation. Airline fares and computer prices also dropped, helping lower the index.

Energy prices dropped 2.9 percent, mostly because of lower gas prices at the pump. The Sacramento regionâ¿¿s average gas price was $3.04, which was little changed from a month earlier.

But ⿿core⿝ consumer prices, which eliminate the more volatile energy and food prices, increased 0.2 percent last month, and only 0.9 percent for the past 12 months ⿿ below The Federal Reserve⿿s inflation goal and a 44-year low, according to the Labor Department report.

In fact, some national analysts say deflation, when prices and wages decline, is a real concern, something that has not occurred since the Great Depression.

And employee wages are basically just keeping up with the modest increase in products, climbing 0.6 percent for the past 12 months.

According to local economists, consumer prices have remained steady in the four-county region as well. The Sacramento region is battling a 12 percent jobless rate, with about 125,000 people looking for work â¿¿ or almost as many people who live in Elk Grove.

Copyright 2010 American City Business Journals
Copyright 2010