RECESSIONOMICS

Flat Prices May Boost Economy

Some good news for consumers: Prices on goods from computers to clothing have remained flat, which led the Federal Reserve to keep interest rates low. Though the Labor Department reported Friday that the consumer-price index is rising slightly, policymakers removed food and energy prices from their calculations, revealing that prices actually fell in January for the first time since 1982. That stabilization and the fact that core inflation is barely up has lead the Federal Reserve to maintain remarkably low interest rates, focusing instead on growth and jobs. Those worried about the Fed raising rates, a concern sparked by Thursday’s rate increase in emergency loans to banks, can now rest easy. On Friday, there was indication that traders believe the Fed won’t raise the rates banks charge on loans to one another until October. Though consumers are pleased with lower prices, companies are feeling the pressure to make money even at chains like Wal-Mart and Jack in the Box.