Updated from 9:11 a.m. EST

Perhaps in tune with the holidays, November's consumer price report rang a bell, rather than trigger inflation alarms the way October's did.

Prices rose 0.2%, as expected, and at a less-threatening pace than the 0.6% spike in October. Excluding food and energy costs, prices also rose 0.2%, which matched expectations as well as the prior month's increase. Nevertheless, November's CPI reading was 3.5% higher than a year ago.

Both food and energy costs rose 0.2%, down sharply from the prior month. Education and communication prices led gains, rising 0.4%.

The government last week said the producer price index rose 0.5% in November, much more than the consensus estimate of 0.1%. Excluding food and energy costs, however, prices rose just 0.2%, as expected. Energy costs rose 1.8%, led by natural gas prices, which jumped 6.2%. Food prices rose 0.4%.

The latest CPI data are unlikely to change the


thinking on interest rate policy in the months ahead. The central bank this week raised interest rates a quarter of a percentage point for the fifth time since late June, taking the federal funds rate up to 2.25%.

The White House today issued its 2005 economic forecast, which said inflation will slow to 2% next year. In addition, economic growth is expected to slow to 3.5% rate, down from 2004's 3.9% pace.