Archive for Saturday, December 13, 2003

Price index reveals no threat of inflation

December 13, 2003

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— Wholesale prices retreated by 0.3 percent in November, pulled down by falling costs for gasoline, beef and cars, suggesting that the economy's resurgence isn't fanning inflation.

The decline in the Producer Price Index, which measures prices before they reach store shelves, came after prices rose by 0.8 percent in October, the Labor Department reported Friday. That jump had unsettled some analysts who worried whether the seeds of inflation were being planted and could take root down the road.

Economists were expecting wholesale prices to calm down in November after October's big increase. But they were forecasting a 0.1 percent rise.

The 0.3 percent drop marked the first decline in wholesale prices since May.

"There is no inflation threat to the current economic rebound. None whatsoever," said Mark Zandi, chief economist at Economy.com.

Excluding energy and food prices, which can swing widely from month to month, "core" wholesale prices dipped by 0.1 percent in November.

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