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Recession Pushes US Prices Down at Record Pace


Consumer prices fell by a record amount in the United States in November, as oil prices dropped and the deepening recession cut demand in the world's largest economy.

A separate report says the number of new homes under construction in the United States fell by a record amount in November, reflecting continued problems with tight credit.

The new economic reports make it even more likely that the officials of the U.S. central bank will try to boost lending by cutting the key interest rate later Tuesday.

The action by the U.S. Federal Reserve would make it cheaper to borrow money to expand businesses and make purchases.

The Fed is expected to announce other efforts to aid the economy. These might include purchasing large amounts of U.S. government bonds, which would have the effect of putting more cash into the economy and encourage lending.

President-elect Barack Obama says as the key interest rate gets cut close to zero, the Fed is running out of the kind of "ammunition" traditionally used to fight recessions. He says officials still have other "tools" available, but it is time for all branches of government to step up to cope with the economy. Mr. Obama also said officials expected to serve in his administration are crafting an economic recovery plan that will focus on improving infrastructure and providing jobs.

In the meantime, another large Wall Street firm is reporting serious problems. Goldman-Sachs reported a loss of more than $2 billion for one three-month period. The financial crisis has pushed many other banking and investment firms out of business.



Some information for this report was provided by AFP, AP and Reuters.



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