That Surprisingly Low Inflation Rate

How far can inflation drop? The latest batch of figures on the U.S. consumer price index shows an amazing lack of price pressure. The CPI rose just 0.1% in June. For the first six months of 1998, it's running at an annual rate of 1.4%, down from 1.9% in the last six months of 1997. With unemployment at 4.5%, this is truly remarkable, particularly since most economists agree that the official CPI overstates the true inflation rate by at least half a percentage point.

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