If Americans still have one of those Whip Inflation Now buttons lying around from the 1970s, they can probably throw it away. Inflation pretty much doesn't exist.
The U.S. government reported Wednesday morning that consumer prices have risen just 1.3% over the past 12 months. When you exclude the prices of food and energy, prices were up just 1.7%.
Overall prices fell 0.3% in November, driven largely by the dramatic fall in gas prices. This is the biggest drop in the monthly inflation rate and gas prices since December 2008. Prices actually rose 0.1% last month when you factor out oil and food costs.
Many economists, as well as members of the Federal Reserve, prefer to look at that so-called core number that doesn't take into account food and oil.
The argument is that the prices of food and energy tend to be very volatile because they are largely dependent on commodity prices.
Others argue that it's silly to pretend that consumers don't spend a lot of money to eat, drink, drive and fuel their homes. So the latest data provide yet another sign that consumers may have more money in their pockets.
The rapid plunge in oil and gas prices has been touted as a positive for the economy since consumers may treat it like a tax cut and spend more.
And with inflation being so low right now, Americans do have more purchasing power. Although average wages are up just 2.1% over the past 12 months, that's still much higher than the increase in consumer prices.
