WASHINGTON (AP) -- The Labor Department reports on changes in the consumer price index in November. The report will be released at 8:30 am Eastern time Tuesday.
FLAT PRICES: Economists forecast that consumer prices increased 0.1 percent, according to a survey by FactSet. That would follow a 0.1 percent decrease in October. Excluding volatile costs for food and energy, core prices are expected to have increased just 0.1 percent.
LOW INFLATION: High unemployment and small wage increases have made it difficult for businesses to raise prices since the Great Recession ended, keeping inflation tame.
Ultra-low inflation has also allowed the Federal Reserve to pursue its extraordinary stimulus program. And it could encourage the Fed to continue those programs, despite an improving job market and stronger growth. That's because inflation has fallen well below the Fed's target of 2 percent.
Over the past 12 months, overall prices have risen a modest 1 percent. Excluding volatile energy and food costs, so-called core prices have risen just 1.7 percent during the same period.
Falling gasoline costs since the spring have helped kept inflation extremely weak in recent months. Gas prices appear to have bottomed out during the start of November. Gas prices nationwide are averaging $3.23 a gallon, according to AAA's Daily Fuel Gauge Report.
FED WATCHING: For roughly a year, the Fed has been buying $85 billion a month in bonds to keep long-term interest rates low and encourage more borrowing and spending. The Fed has also kept its key short-term interest rate near zero since late 2008.
Fed officials meet Tuesday and Wednesday to discuss these policies, followed by a news conference by Chairman Ben Bernanke.
Critics of the bond-buying program fear it will spark higher inflation in the future.
But the inflation has yet to materialize. Moreover, a number of Fed officials say the program is needed because inflation has been too low.
A small amount of inflation can be good for the economy, because it encourages consumers and businesses to spend and invest before prices rise further. But if prices don't increase at all, consumers might pull back their spending on the expectation that goods will be cheaper in the future.
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