Producer Prices Grew 0.4% in November

Producer Prices Grew 0.4% in November

The Fed's preferred inflation measure, the personal consumption expenditures price index excluding food and energy, has missed the central bank's 2% target for almost 5-1/2 years.

The so-called core consumer price index, which excludes volatile food and energy components, increased 0.1 percent on a seasonally adjusted basis in November from the prior month and 1.7 percent from a year earlier, the Department of Labor said on Wednesday. Wholesale food prices rose 0.3% after increasing 0.5% in October and prices for services gained 0.2% following a 0.5% gain in October. In the 12 months through November, the price of doctor visits fell 1.8 per cent, the biggest decline since records started in 1947. Housing prices rose 0.2 percent.

Over the past year, overall consumer inflation is up 2.2 percent and core inflation is up 1.7 percent.

The Federal Reserve targets 2% inflation. The central bank has increased borrowing costs twice this year and has forecast three rate hikes in 2018. Prices for final demand goods less foods and energy grew 0.3%. Apparel prices fell 1.3 percent, biggest drop since September 1998.

Core goods climbed 0.3% in November, rising by the same margin for a third consecutive month.

Jeff Horn retains title after knocking out Gary Corcoran
Both boxers suffered cuts in the mid-rounds and it was Horn who coped the better to eventually wear down the dogged challenger. Horn's victory over Corcoran moved him toward a mandatory defense against unbeaten Terence Crawford in his next fight.

Steve Reed, economist at the Labor Department, said the department has received lower response rates in the physicians' services category over the last several years. That could be skewing these measures.

The moderation in underlying prices will likely attract the attention of Federal Reserve officials meeting on Wednesday for a second day.

The news comes as the Federal Reserve is poised to raise interest rates later on Wednesday, the third rate hike of the year, and gives ammunition to those anxious about the dangers of inflation. Both gauges have followed the same pattern.

Last month, gasoline prices rebounded 7.3 per cent after falling 2.4 per cent in October.

Related Articles