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.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at