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Consumer Prices Down Sharply With Energy Costs
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Job growth revived last month after stalling in September and October because of the hurricanes. Consumer confidence has bounced back as gasoline prices have ebbed, and retailers have reported a healthy start to the holiday shopping season. Fed officials also expect economic growth to be stimulated in the months ahead as rebuilding continues in the Gulf Coast region.
The nation's factories, mines and utilities boosted their combined production by 0.7 percent in October, the Fed said in a separate report. Part of that gain reflected restored oil production in the hurricane-affected areas.
Businesses also used more of their production capacity in October, pushing the usage rate to 80.2 percent, the Fed reported. Some economists think a rate of 80 percent or above can result in bottlenecks that push prices up.
"Higher levels of utilization, as noted in the most recent [Fed] statement, will tend to put a little more upward pressure on inflation in the months ahead," economists at Goldman Sachs U.S. Economics Research wrote in an analysis for clients.
Most workers' wages rose faster than inflation last month but have fallen over the past year after adjusting for price changes, the Labor Department reported in another report.
Average weekly earnings for most workers rose 0.6 percent in November from the month before, after adjusting for inflation, the department said.
But those wages bought 0.4 percent less last month than a year earlier, after adjusting for inflation.
Moreover, average weekly wages were slightly lower last month, after adjusting for inflation, than they were four years earlier, in November 2001, when the last recession ended, said Jared Bernstein, senior economist at the Economic Policy Institute, a think tank that focuses on labor issues.
