By CountingPips.com
The Producer Price Index, released by the Department of Labor, rose more than expected in November as energy costs increased and boosted inflation on finished goods. Producer prices increased by 1.8 percent in the month of November following an increase of 0.3 percent in October and a decrease of 0.6 percent in September. The annual rate of increase for November showed that producer prices were 2.4 percent higher than November of 2008 after October’s 
annual rate registered a 1.9 percent decrease. This was the first annual increase in producer prices since November 2008. Market forecasts were expecting monthly producer prices to gain by 0.8 percent and the annual rate of increase to register 1.8 percent.
Core producer prices, excluding food and energy prices, rose by 0.5 percent in November following a fall of 0.6 percent in October and surpassing market expectations of a 0.2 percent gain. On an annual basis, core producer prices advanced by 1.2 percent in November compared with an increase of 0.7 percent in October and just below expectations of a 0.9 percent increase.
Helping to contribute to the increased producer prices in November was the cost of energy which advanced by 6.9 percent for the month after increasing by 1.6 percent in October. The crude goods index climbed by 5.7 percent while the foods index also registered a 0.5 percent increase for the month.
Empire State Manufacturing index falls
New York manufacturing activity fell in December as sentiment among New York manufacturers declined by more than expected after four months of improvements according to data released today by the New York Federal Reserve. The Empire State Manufacturing Survey, a monthly business survey of New York State manufacturers, showed that the general business index in New York declined from a 23.5 score in November to a 2.6 score in December. The 21-point drop was the biggest monthly drop on record and easily surpassed forecasts calling for a 24.00 score.
The new orders index fell this month by over 14 points to a 2.20 score while the prices paid index rose from 10.53 points in November to 19.74 in December. The unfilled orders index decreased by over 18 points to a -21.1 score. The employment indexes also decreased in December with the number of employees index falling by 7 points and the average workweek index declining by 11 points.
The Empire State Manufacturing Survey is a monthly business assessment of New York State manufacturers produced by the New York Federal Reserve.
Foreign Investment in US declines in October
Also released today was the Treasury Department report on foreign investment for United States securities and it showed foreign investors scaled back on US investments in October. This important data to watch capital flows in and out of the US showed that foreign investors bought a total of $43.4 billion in long-term US securities in October after spending $55.7 billion in September. The net purchases by foreign investors was $28.8 billion while foreign official institutions purchased $14.6 billion in October. US residents, meanwhile, purchased a net of $22.7 billion worth of long-term foreign securities.
US Dollar is stronger in Forex Trading as Stocks are lower
The U.S. dollar has traded higher today against the other major currencies in the spot forex market. The dollar has gained versus the euro, British pound, Japanese yen, Australian dollar, Canadian dollar, Swiss franc and New Zealand dollar according to currency data by Oanda at 2:44 pm EST.
The US stock markets have declined so far today with the Dow falling by approximately 30 points, the Nasdaq decreasing by almost 1 point and the S&P 500 down by over 3 points. Oil has increased by almost $1 to $70.67 while gold has lost $.60 to level at $1,122.70 per ounce.
EUR/USD 4H Chart – The Euro falling today versus the US Dollar and declining towards the 1.4500 threshold. The Euro has fallen sharply in the last couple of weeks since trading at the high of 1.5140 as recently as December 3rd.
