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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

November consumer prices rise slightly

A small and expected rise in consumer prices kicked off a morning full of economic data released moments ago that help tell us where we are in this recovery of ours.

In November, consumer prices -- or inflation -- rose 0.4 percent, the government said, hitting expectations. Forecasters expected the overall inflation number to rise 0.4 percent.

Year-over-year, prices are up 1.8 percent.

Core inflation -- if you take out volatile food and energy prices -- was 0 percent, meaning prices did not rise at all in November. Forecasters expected this number to rise only 0.1 percent.

Core inflation is up 1.7 percent, year-over-year.

In other news released moments ago, November housing starts came in at 574,000 units, beating expectations. Forecasters predicted 563,000 starts in November, up from October starts, fueled by the first-time homebuyer credit and low interest rates.

And in other news, the U.S. current account showed a deficit of $108.03 billion, meaning of course, that we are a debtor nation to the rest of the world, which comes as no news to readers of this space.

The November inflation numbers -- coupled with Tuesday's surprise spike in wholesale prices -- may placate inflation hawks and cool worries in consumers about continued rising prices. This -- especially important in an economy that already has 10 percent unemployment -- is worrisome. If inflation becomes a concern to the Federal Reserve, it will have to raise interest rates, which will put extra pressure on this fragile economy.

Speaking of the Fed, it concludes its two-day meeting today and will release a policy statement on interest rates this afternoon, which remain at historic lows. No one expects the Fed to raise interest rates yet, but today's statement may telegraph when it may.

Also speaking of the Fed, Time magazine named Fed chairman Ben Bernanke its person of the year.

The markets were surprised by yesterday's spike in November wholesale inflation, which you can read about by clicking here.

Forecasters predicted wholesale inflation would rise 0.8 percent in November; instead, it shot up 1.8 percent, depressing the markets at opening and keeping them in the red through closing.

We'll see in an hour what today's consumer price news has on the markets.

-- Frank Ahrens
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By Frank Ahrens  |  December 16, 2009; 8:51 AM ET
Categories:  The Ticker  | Tags: housing starts, inflation  
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