Inflation
So what about inflation? I'll start with what the data tell us. The retail price measures jumped at year end as the price of gasoline rose. But looking beyond the rise in gasoline prices, consumer price increases remained exceptionally modest. In fact, about 25 percent of the consumer's market basket as measured by the consumer price index (CPI) showed declines in December.
A similar pattern is evident at the producer level, where industrial commodities prices were elevated during the fourth quarter. But excluding energy, upward price pressures at the producer level were less evident in the data.