Flat Inflation Signals Rate Cut?

Consumer prices posted their best record in nearly five years last month, showing no overall increase. Food, energy, clothing and transportation costs all fell.

Many analysts said the inflation news, along with a round of European interest rate cuts, increased chances the Federal Reserve will lower U.S. rates next week.

The Labor Department said Thursday its Consumer Price Index did not move in November, the first time it remained unchanged since March 1991. The CPI has not declined since April 1986.

“Certainly the odds on a Fed easing have been improved by this report,” said Robert G. Dederick, economic consultant with the Northern Trust Co. in Chicago. “There’s not a barrier on the inflation side whatever.”