WASHINGTON (AP) — Consumers likely didn’t see much of an increase in prices in November, outside a probable rise in food costs.
Economists project that the Consumer Price Index rose 0.2 percent last month, matching the October increase. Excluding the volatile food and energy categories, core consumer prices increased 0.1 percent, economists forecast. That would be the first increase in core prices in four months.
The report will be issued at 8:30 a.m. EST Wednesday.
High unemployment and a sluggish economy are keeping a lid on prices. Retailers don’t want to risk losing customers by raising them. Many are offering discounts to keep sales moving.
Tame prices provide support for the Federal Reserve’s efforts to boost the economy through its $600 billion bond purchase program. The goal of the purchases is to lower longer-term interest rates and spur more borrowing and spending.
Critics, including some Republicans in Congress, charge the program could lead to rapid inflation. But supporters point out that there is little sign of that so far: In the past year, the core consumer price index has risen only 0.6 percent, the smallest annual rise since the index began in 1957.
Fed Chairman Ben Bernanke would actually like to see prices rise faster than that in order to stave off deflation, a widespread and debilitating drop in prices, wages, and the value of homes and other assets.
After meeting on Tuesday, Fed policymakers said that “measures of underlying inflation have continued to trend downward” and are below levels consistent with the central bank’s goal of stable prices.
Prices are increasing at the wholesale level. On Tuesday, the Labor Department said that wholesale prices rose 0.8 percent last month, the biggest increase in 8 months.
Outside of food and energy, the index moved up only 0.3 percent. In the past year, core wholesale prices are up 1.2 percent.