So Much for Inflation

Now maybe the Fed will stop jacking up rates before they cause another recession? From the WP.

WASHINGTON -- A record plunge in the cost of gasoline pushed consumer prices down by the largest amount in 56 years in November while industrial production posted a solid gain.

The new government reports Thursday provided further evidence that the economy is shaking off the blows delivered by a string of devastating hurricanes. But analysts cautioned that the huge drop in consumer prices was overstating the improvement in inflation.

The Labor Department report showed the Consumer Price Index fell by 0.6 percent last month, the biggest decline since a 0.9 percent fall in July 1949. It reflected a record fall in gasoline prices, which have been retreating since they surged to above $3 per gallon right after Katrina hit.