Overall producer prices decreased 1.6% in October from a year earlier, the 10th straight year-over-year decline and the biggest annual fall since the government started publishing the series in 2009. Core prices were up 0.4% from a year earlier.
Those gauges have been historically weak this year amid low oil prices, a strong dollar and weak demand abroad.
Federal Reserve officials are looking for evidence of firming inflation before they raise interest rates from near zero, where they have held since 2008. Officials have said they want to be “reasonably confident” inflation will move toward the Fed’s 2% target before liftoff.
However, “low oil prices (note that it´s not falling oil prices anylonger), and a strong dollar” are the consequence of weak domestic demand (falling NGDP growth). Weak demand abroad is partly due to weak demand in the US!