Even More Deflationary Concerns

The CPI Index fell by a record 1.7% in November (largest monthly decline since the Labor Dept. began compiling the figure in 1947). The steep drop in the index was the result of a 17% decrease in energy prices and broad downward pressure on AD. The core CPI remained unchanged over October. Furthermore, the CPI rose 1.1% on a year-over-year basis in November, which is below the 1.5% to 2% range thought to be targeted by the Fed.