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U.S. Future Inflation Gauge Drops

U.S. inflationary pressures ebbed to a 27-month low in August... a research group said on on Friday.

The Economic Cycle Research Institute's U.S. Future Inflation Gauge (USFIG), designed to anticipate cyclical swings in the rate of inflation, fell to 116.8 in August from 119.5 in July, upwardly revised from 119.3.

The figure for August was the lowest since mid-2005.

"With the USFIG at a 27-month low, underlying inflation pressures continue to ebb," said Lakshman Achuthan, managing director at ECRI, a New York-based research group.

"With respect to the inflation outlook, this gives policy makers additional leeway to lower interest rates."

The USFIG's annualized growth rate, which smooths out monthly fluctuations, dropped to minus 5.1 percent from minus 1.4 in July, revised from negative 1.7.