U.S. Inflation Jumps 1.8% in Past 12 Months, Consumer Prices Up 0.4% in November

US inflation over the past 12 months returned to positive territory for the first time since February, according to government data released Wednesday.

The latest Labor Department monthly report reveals that the Consumer Price Index, which measures inflation pressures at the consumer level, increased 1.8% from a year ago, and rose 0.4% in November.

The November reading was inline with most analysts’ expectations, and follows a 0.3% gain in October. The cost of living for Americans increased due to several categories, but was led by 4.1% jump in energy prices — the fourth straight monthly increase. Oil prices shot up 9%. Gasoline prices notably rose as well, soaring 6.4% in November after an increase of 1.6% in the month prior.

The so-called core consumer index that excludes the more volatile food and energy items was unchanged in November, marking the first month in ten without an increase. Analysts were expecting a 0.1% increase. The core CPI rose 0.2% in October.

The annual inflation increase of 1.8% compares to the 0.2% drop in the past 12 months that was reported in October. Core inflation increased 1.7% over the past 12 months, matching the annual reading in October. The inflation figure is within the Federal Reserve’s comfort range of between 1%-2%.

Fed policy makers are scheduled to wrap up a two-day meeting later today. No significant changes in policy are expected, with interest rates likely held at 0% to 0.25%.

"I expect more of the same from today’s Fed comments. I think they’ll talk up continued low interest rates and economic healing. I don’t think expect them to change their tune," John Massey, portfolio manager at AIG Sunamerica Asset Management in Jersey City, New Jersey, said on Reuters.

Consumer price details

Rising November prices include:

  • New vehicles prices rose 0.6% after a 1.6% rise in October
  • Used car and truck prices climbed 2.0% compared to the 3.4% increase during the month prior
  • Energy prices soared 4.1% following a 1.5% increase in October
  • Gasoline prices jumped 6.4% following an increase of 1.6% from the month prior
  • Fuel oil prices surged 9.0%. They rose 6.3% in October.
  • Electricity costs were up 1.4% after increasing 0.6% in the two previous months
  • Food prices rose 0.1%, matching October
  • Airfares rose for the fifth straight month, increasing 3.8% in November
  • Natural gas prices rose 1.5% following a 1.9% up tick in October
  • Medical care prices climbed 0.3% in November. Prices were up 0.2% in October.
  • Prescription drugs climbed by 0.2%.
  • Tobacco prices advanced 1%

Declining November prices include:

  • Dairy and related products declined 0.7% after increasing 1.0% in October
  • Lodging away from home prices fell 1.5% after a rise of rose 0.4%
  • Clothing prices declined 0.3% in November after declining 0.4% in the month prior
  • Housing prices, which accounts for about a third of the CPI index, decreased 0.2% after unchanged readings from the two prior months

On Tuesday, the Labor Department released the Producer Price Index, which measures prices at the factory door and inflation pressures before they reach the consumer. The PPI showed a 1.8% surge in November. Discounting volatile food and energy prices, the core reading climbed more than expected at 0.5% — the biggest increase since October 2008. Core prices retreated 0.6% in the month prior.

To find out how the buying power of the dollar has changed over time, check out the updated US Inflation Calculator.

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