Inflation Remains Subdued in November

Inflation remained subdued in November, as considerable slack in the economy reined in prices at the consumer level.
By Shanthi Bharatwaj ,

NEW YORK (

TheStreet

) -- Inflation remained subdued in November, as considerable slack in the economy reined in prices at the consumer level.

The Consumer Price Index rose 0.1% in November, after rising 0.2% in the previous month, the Labor Department said early Wednesday. That was below the 0.2% rise economists were forecasting according to Briefing.com.

The core price index, which excludes volatile food and energy prices, rose 0.1%, in line with expectations. Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment. The core index has risen 0.8% over the past year.

Increases in the indexes for shelter and airline fares accounted for most of the rise, while the indexes for new vehicles, used cars and trucks, and household furnishings and operations all declined, the report said.

On Tuesday, the Labor Department said prices at the wholesale level rose more than expected. The Producer Price Index for finished goods, or PPI, increased 0.8%, after rising 0.4% in October. Economists were expecting PPI to rise by 0.5%, according to consensus estimates from

Briefing.com

.

The subdued inflation levels have been a source of concern for the

Federal Reserve

. The central bank said on Tuesday that it will continue its $600 billion bond purchase program as the recovery in the economy was not significant enough to make a dent in unemployment. The Fed also said that while longer-term inflation expectations have remained stable, measures of underlying inflation have continued to trend downward.

Low inflation and the threat of deflation was one of the reasons the Fed embarked on its quantitative easing program. The Fed has previously indicated that it would like inflation to be closer to 2%.

The

SPDR S&P 500 ETF

(SPY) - Get Report

, the

SPDR Dow Jones Industrial Average ETF

(DIA) - Get Report

and the

PowerShares QQQ

(QQQQ)

were falling in premarket trading as eurodebt concerns resurfaced.

--Written by Shanthi Bharatwaj in New York

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