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News > Economy
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U.S. wholesale prices fell
graphic December 13, 2001: 10:58 a.m. ET

Producer price index down 0.6 percent, "core" rate up 0.2 percent.
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  • Retail sales see sharp drop - Dec. 13, 2001
  • U.S. jobless claims fell by 86,000 - Dec. 13, 2001
  • ECB cuts growth outlook - Dec. 13, 2001
  • Retailers' November sales mixed - Dec. 6, 2001
  • U.S. manufacturing gets a lift - Dec. 3, 2001
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  • U.S. Department of Commerce
  • U.S. Department of Labor
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    NEW YORK (CNN/Money) - Wholesale prices fell in November, the government said Thursday, showing inflation remains in check as a sluggish world economy helped keep the price of energy imports low.

    The Producer Price Index -- a measure of prices at the wholesale level -- fell 0.6 percent after a record 1.6 percent drop the previous month, the Labor Department said. The drop in prices was larger than Wall Street forecasts of 0.4 percent.

    "PPI was very well behaved due to energy, though there was a rebound in car prices. Aside from that, the trend is soft in terms of prices. That confirms weakness in economic activity," said Jade Zelnik, chief economist for Greenwich Capital Markets.

    Excluding often volatile food and energy prices, the so-called core PPI rose 0.2 percent after falling 0.5 percent in October. Analysts were expecting the core rate to fall 0.5 percent.

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      PPI was very well behaved due to energy, though there was a rebound in car prices. Aside from that, the trend is soft in terms of prices. That confirms weakness in economic activity.  
         
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      Jade Zelnik, chief economist for Greenwich Capital Markets  
    The November decline was led by another big drop in energy prices, which offset rising prices for autos and tobacco.

    Tobacco product prices, which were flat in October, rose 1.8 percent. Passenger car prices posted a gain of 0.9 percent following a 4.7 percent drop in October when shoppers rushed to take advantage of low-interest financing deals.

    Gasoline prices fell another 10.3 percent and prices for heating oil registered a 7.4 percent decline. Oil prices have dropped over $10 a barrel since mid-September as the slower economy has dampened demand.

    The report provided yet more evidence that the Federal Reserve does not need to worry about inflation when cutting interest rates.

    The U.S. central bank has said it does not see inflation as an imminent problem for the U.S. economy. In a statement released on Tuesday, when it cut interest rates for the 11th time this year to 1.75 percent from 2.00 percent, the Fed said, "Economic activity remains soft, with underlying inflation likely to edge lower from relatively modest levels."

    Analysts said this wording indicates that risks of stoking inflationary pressures with easy money will not stand in the way of further Fed rate cuts if they prove needed to revive an economy in its ninth month of recession.

    Separately, the Commerce Department said retail sales fell a record 3.7 percent last month after October's big jump, which was fueled by low-interest loan incentives offered by automakers. Auto sales account for about a quarter of all retail sales. graphic

      RELATED STORIES

    Retail sales see sharp drop - Dec. 13, 2001

    U.S. jobless claims fell by 86,000 - Dec. 13, 2001

    ECB cuts growth outlook - Dec. 13, 2001

    Retailers' November sales mixed - Dec. 6, 2001

    U.S. manufacturing gets a lift - Dec. 3, 2001

      RELATED LINKS

    U.S. Department of Commerce

    U.S. Department of Labor





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    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

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