Have We Reached The End of Rate Hikes?

Prices Drop by Largest Amount in 56 Years

WASHINGTON - Consumer prices plunged by the largest amount in more than a half- century in November as gasoline prices fell by a record amount. The Labor Department reported Thursday that its closely watched Consumer Price Index dropped by 0.6 percent last month, the biggest monthly decline since a 0.9 percent fall in July 1949.

The decline was better than the 0.4 percent drop that analysts had been expecting. Outside of the volatile food and energy categories, prices were up 0.2 percent, a modest gain that should help relieve fears that this year's surge in energy costs could evolve into more widespread inflation problems.

In other economic news, the number of people who have lost jobs because of the string of devastating Gulf Coast hurricanes climbed to 602,200 last week. That gain reflected a rise of 1,500 jobless applications linked to Katrina and Rita and an additional 1,000 claims linked to Wilma, which hit Florida in October.

Overall, the number filing new claims for unemployment benefits totaled 329,000 last week, compared to 328,000 the week before. Analysts said that even with the slight rise of 1,000 in overall claims, they remained at a level consistent with strong employment growth.

4.3% growth, 2.4% inflation. Like to hear the negative spin on that!

Oh, and by the way, there's this.....the Federal Reserve said output at the nation's factories, mines and utilities rose a solid 0.7 percent last month following a 1.3 percent rise in October. Industrial output had plunged by 1.6 percent in September, reflecting widespread shutdowns of oil refineries, chemical plants and other factories along the Gulf Coast.