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US Consumer Prices Drop

FILE - Towels are on display on a sale rack at a Walmart store in Rogers, Arkansas.
FILE - Towels are on display on a sale rack at a Walmart store in Rogers, Arkansas.

U.S. consumer prices fell seven-tenths of a percent in January, the sharpest drop since 2008.

Thursday's report from the Labor Department says falling gasoline costs brought overall prices down by one-tenth of a percent over the past 12 months.

Economists say falling gasoline prices are good for consumers as they allow them to spend money on other goods and services.

Outside the volatile areas of energy and food, prices in the overall economy are still rising a bit, but remain below the two percent level experts at the U.S. central bank consider healthy.

Some economists say worries that inflation is too low might prompt the Federal Reserve to keep interest rates at record-low levels a bit longer.

Other economic data were mixed.

New applications for unemployment compensation rose by 31,000 last week to a nationwide total of 313,000. Experts say even with the increase in layoffs, the job market remains basically healthy.

A separate report shows orders for long-lasting manufactured goods rose 2.8 percent in January, though, excluding commercial aircraft, the gain was a more modest three-tenths of a percent. Stronger factory orders generally point toward economic growth.

On Friday, officials will publish the latest information on U.S. economic growth. Economists surveyed by the Bloomberg financial news service predict the data will show the U.S. economy grew at a 2.1 percent annual rate in the last few months of 2014. This would be a bit slower than first estimated.

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