Business: Inflation Slowdown

One of the most worrisome threats to the budding economic recovery—and to U.S. living standards—was the sudden resurgence of double-digit inflation in June and July. Last week, though, the Labor Department had some good news for Americans. It reported that the rise in the Consumer Price Index slowed radically to an annual rate of 2.4% in August, from 15.4% the previous month. Retail food prices, which had shot up in early summer, did not rise at all in August. The purchasing power of the average worker's paycheck was 1.1% higher than in August 1974, marking the first time that real spendable...