The US producer price index fell another 2.2% in the month of November, following a record 2.8% decline in October, the lowest level since 1947. And wholesales energy prices, which fell 11.2% for the month, has much to do with the decline. Core PPI, which excludes energy and food prices because of their volatile nature, did increase a bit, gaining 0.1%. Economists had forecast a 2.0% loss for the PPI, and a 0.1% gain for the core.

In the last year, producer prices have increased just 0.4%, breaking its underlying trend. But core prices are apparently still in this inflationary trend, as witnessed by its 4.2% gain in the last year. The same applies for capital equipment, whose prices also rose 0.1% in November, and are up 3.7% in the last year. Any increased demand in our economy and we may be looking at higher prices once more, especially with all the money being pumped into the economy by the Fed.

Report Details (via MarketWatch):

Energy prices plunged 11.2% in November after a 12.8% drop in the previous month. Gasoline prices had their second consecutive record monthly decline.

Home heating oil prices fell by 23.3%, the largest decline since April 2003.

Food prices were unchanged in October. This was the lowest reading since April.

Prices of intermediate goods fell a record 4.3% in November. Crude goods fell 12.5% after an 18.6% drop in the prior month.

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