Energy Prices Are Keeping Inflation Low

Falling energy prices are holding back inflation.

Producer prices fell 0.2% in November, which was a bigger drop than the 0.1% decline expected by economists.

“Sixty per cent of the November decline in prices for final demand goods can be attributed to the index for gasoline, which dropped 6.3 per cent,” the Bureau of Labour Statistics noted.

“The PPI survey for petroleum products is in the first half of the month, so this month’s report probably won’t pick up a steep further drop in gasoline prices after mid-November,” Morgan Stanley’s Ted Wieseman said ahead of the report.

Below is a breakdown of price changes by grouping.

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