Plunging gas prices pushed wholesale costs lower in November, a sign of weak inflationary pressure, adding to the Fed's debate about when to hike interest rates. Jeanne Yurman reports.
Collapsing oil prices drove down wholesale costs in November. The producer price index ticked down two-tenths of one percent last month - a fraction more than economists had forecast.- as lower gas prices depressed headline inflation. Minus food and energy core inflation at the wholesale level was flat. Americans are loving lower oil prices that translate into savings at the pump. But globally, deflation concerns are growing as countries dependent on oil exports face slowing demand and weakening currencies. November's core number could be be an issue for Federal Reserve policymakers who are meeting next week to debate the Central Bank's current pledge to keep borrowing costs rock bottom for a "considerable time". This report is a sign of weak inflationary pressure that could point to persistent slack in the economy - making it harder to hike interest rates - a move expected the middle of next year. At the same time, stagnant inflation is less of a concern given gains in the labor market and economists say the trend in core inflation is still modestly positive.