Daily Pulse

Good news on inflation

Joel Patterson Dec 16, 2011

The Pulse is up today on news that inflation is not something Americans have to worry about over the holidays.

The Labor Department announced that falling energy prices kept the Consumer Price Index flat in November. The CPI is a measure of the average change in prices over time of goods and services purchased by households, and it’s a big indicator of how economists measure inflation.

It’s not that prices are down. We actually spent more on food, doctor bills and clothes last month (actually, over the course of the last year, high cotton prices have driven the biggest gain since 1991 in what we pay for clothing). But when you factor in the decreasing cost of energy, the outlook gets rosier, at least in the near term.

Falling oil prices, driven in part by slowing growth in China and Europe’s economic woes, have experts optimistic that we’ll keep inflation at bay into the new year.

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