Friday's report on the producer-price index — a measure of prices received by U.S. companies for goods and services — showed prices at the wholesale level were unchanged in August, after rising 0.3 percent in the previous month.
The reason for the declines was clear: plunging oil and gasoline prices. The PPI report showed prices for goods declined 0.6 percent, with lower gasoline prices accounting for two-thirds of the decline.
Extend the PPI report out for the past 12 months and prices were actually down 0.8 percent from the previous August.
The future of oil and gasoline prices will continue to dominate the pace of inflation. And, there is no shortage of opinions about where the price is headed.
Goldman Sachs, in a report issued Friday, said the abundant oversupply of oil reserves will continue to pressure prices, perhaps pulling the cost down to as low as $20 a barrel.
"The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016," the Goldman report said.
As is the case with any commodity, prices are determined by supply and demand.
"The reason for the decline is simple: the plunge in oil prices from $100 a barrel to just above $40 currently,” said Hilary Kramer, chief investment officer of A&G Capital.
“The downside began due to greatly increased supply of U.S. oil production, as hydraulic fracturing was able to retrieve oil from previously hard to get locations, thanks to improved drilling technology. High prices along with lower interest rates made such projects economical."
While members of OPEC have made it clear they have no intention of cutting oil production, other sources may be forced to pull back because of the lower prices.
The International Energy Agency said Friday that with prices at a six-year low, the production cuts will likely come from non-OPEC suppliers. In particular, the agency said lower output in the United States, Russia and the North Sea will drop overall production to 57.7 million barrels a day, down by half a million barrels.
"U.S. monthly crude oil production is expected to decline through the middle of next year in response to low oil prices,” said Adam Sieminski, administrator of the U.S. Energy Information Administration.
“Despite the expected decline in monthly crude oil production, U.S. total oil output this year is forecast to be the highest since 1972."
However, while consumers may be curious about the direction of oil prices, they are much more interested in the price they pay at the pump for gasoline.
"U.S. drivers will continue to see the effects of low crude oil prices as gasoline prices are expected to decline through the rest of this year, with the pump price falling to a national average of $2.03 a gallon by December," Sieminski said.
It is unlikely drivers in San Diego County will see it get that low — because of higher taxes and refining costs — but a price of about $2.30 a gallon is not out of reach.