Consumer prices drop by largest percentage in 6 years
WASHINGTON – U.S. consumer prices fell in December by the largest amount in six years, reflecting another big monthly decline in gas prices and providing further evidence of falling inflation pressures.
The Labor Department said Friday its consumer price index dropped 0.4 percent last month, the biggest one-month drop since December 2008. It was also the second straight monthly decline in prices with both months reflecting big decreases in gas prices, which have been tumbling in recent months because of the global plunge in oil prices.
Core inflation, which excludes volatile food and energy, showed no increase in December, only the second time since 2010 that core prices have not risen.
For all of 2014, overall inflation was up just 0.8 percent, the smallest annual increase since 2008. The 0.8 percent rise in prices for the year compared to a 1.5 percent increase in 2013 and a 1.7 percent increase in 2012.
USPS proposes increase for postcards, international letters
WASHINGTON – The U.S. Postal Service has proposed slight increases for mailing postcards and international letters – but wants to leave first-class “Forever” stamps at their present 49 cents.
Under a filing with the Postal Regulatory Commission, letters to international destinations would rise from $1.15 to $1.20. Postcards would rise from 34 cents to 35 cents.
The increases proposed Thursday would become effective April 26, if the requests are granted.
On first-class mail, every ounce over 1 ounce would cost an additional 22 cents, up from 21 cents.
The Postal Service said the requested price increases are the latest in a series of steps “to achieve financial stability.”
EU says Amazon, Luxembourg tax agreement may be illegal
BRUSSELS – The European Union’s executive says the tax deal Amazon signed with Luxembourg may be illegal.
The EU opened an investigation into Amazon in October and on Friday gave a preliminary assessment of its concerns with the technology company’s dealings.
Amazon registers its profits from across the EU at its unit in Luxembourg. Amazon’s taxable profits in Luxembourg are further reduced by making royalty payments to another Luxembourg-based Amazon entity that is not subject to corporate taxation.
The result is that not only does Amazon pay little tax in many EU countries where it operates, but also that its effective tax rate in Luxembourg is particularly low.
The EU Commission said Friday it is worried this arrangement could “grant an economic advantage to Amazon” compared with other companies.
Wet Seal files for bankruptcy amid stiff fashion competition
NEW YORK – The Wet Seal Inc. has filed for Chapter 11 bankruptcy protection in an effort to keep its remaining teen clothing stores open.
The announcement Friday comes a little more than a week after the chain said it was closing 338 stores, or about two-thirds of its total.
Fellow teen clothing retailers Delia’s Inc. and Deb Stores filed for Chapter 11 bankruptcy in December, further evidence of trouble in a business being hurt by tough competition.
Wet Seal had warned last month that it might need to file for bankruptcy protection if it did not resolve its cash issues after reporting another quarter of losses.
Wet Seal and other chains are being hurt by stores like H&M and Forever 21 that are wooing young people with fast-changing selections of low-priced fashion. Teens are also more interested in outfitting themselves with the latest tech gadgets than new jeans.