There was certainly no inflation to speak of in yesterday’s (December 15) consumer price data. The headline Consumer Price Index (CPI) climbed a scant 0.1% in November. The core inflation rate, which excludes food and energy prices, rose 0.1%.
This puts the annual headline inflation rate at 1.1% and year-to-year increase in core prices at 0.8%. That core rate is actually up from the 0.6% annual rate, the lowest in the 52-year history of the index, recorded in October.
What inflation there is showed up in the prices of individual objects in the market basket used to calculate inflation. Egg prices, for example, climbed 6.6% in the month and prices for fresh fruits rose 2%. Airline fares gained 3%.
Nothing in these numbers, in other words, to make the Federal Reserve rethink its policy of quantitative easing and the purchase of $600 billion in Treasury bonds by the end of June. The Fed has a target of 2% to 2.5% inflation and the economy is a long way from that.
But there continue to be signs that the economy is picking up. Industrial output rose at a 5.4% annual rate in November. Industrial output had dipped in October.