The consumer price index declined 0.3 percent in November, according to the Bureau of Labor Statistics. This is the first decline since May, and it was largely the result of lower energy prices. After energy costs rose in August and September, they have fallen since then. In November, for instance, gasoline prices fell 7.4 percent. Overall energy costs were 4.1 percent lower.

Core inflation – which excludes food and energy costs – rose just 0.1 percent. Food prices increased 0.2 percent, with the largest gains among dairy products (up 0.8 percent), fats and oils (up 0.8 percent), and nonalcoholic beverages (up 0.5 percent)

The key takeaway for core rates is that they have eased as energy prices have pulled back. Consumer prices have increased 1.8 percent since November 2011, with year-over-year rates declining from the 2.2 percent pace last month.

This suggests that inflation, at least for now, remains in-check and below the Federal Reserve’s stated target of 2 percent or less. This has allowed the Fed to continue to pursue highly accommodative monetary policies, including the purchase of $85 billion in mortgage-backed and long-term securities each month that was announced a couple days ago. This has helped to push interest rates to historic lows as the Fed attempts to stimulate economic growth.

Chad Moutray is chief economist, National Association of Manufacturers.

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