Inflation Was A Bit Cooler Than Expected

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Photo: Photographed by Thierry Bal via Tatton Park Biennial 2012

The December reading of producer price inflation is out.Click Here For Updates >

Prices fell 0.2 per cent from November.  Economists were looking for a decline of 0.1 per cent.

Excluding food and energy prices, prices climbed by just 0.1 per cent, which was lower than the 0.2 per cent climb forecasted.

Year-over-year, headline producer price inflation climbed by 1.3 per cent.

During the December meeting of the Federal Open Market Committee, the Fed said that it would use unemployment rate and inflation rate thresholds to help guide monetary policy.

The inflation rate threshold was 2.5 per cent. This puts today’s low PPI numbers into some context.

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