Tokyo: US growth may further slow and the economy slip into deflation as unemployment stays high and consumption stagnates, Japan's Cabinet Office said in an annual report
"We consider there is a risk of deflation in the US in the not-distant future," Tomoko Hayashi, an economist at the Cabinet Office, told reporters in a briefing this week ahead of the report's release.
US consumer prices excluding food and fuel, the gauge followed by central bankers, increased 0.6 per cent from October 2009, the smallest gain in year-over-year data going back to 1958, the Labour Department said this month.
Forecasts raised
Federal Reserve policy makers raised their unemployment forecasts for the fourth quarter of next year to a range of 8.9 per cent to 9.1 per cent, compared with 8.3 per cent to 8.7 per cent in their previous forecast in June, according to minutes from their November 2 to 3 meeting.
The FOMC said in its November 3 statement that the jobless rate is too high and inflation too low compared with long-run levels consistent with the Fed's legislative mandates for stable prices and employment.
