US Annual Inflation Sticks by 2-Year High; Consumer Prices Mark Fourth Rise in November

The cost of living in the United States climbed in November for a fourth month in a row, and the annual inflation rate jumped the most in over two years, according to government data released Thursday, December 15.

Once again, increases were mostly spurred by higher gasoline and shelter costs. Transportation, used vehicles, and medical care services also rose after having been unchanged or declining previously.

In the headline figure, consumer prices gained 0.2% in November, but was lower than the 0.4% increase in October, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what Americans pay for everything from car insurance to cereal.

In some key categories:

  • Gasoline prices moved up 2.7% last month after jumping 7% in October. Prices at the pump are now 1% higher than a year earlier. The broader index for energy, which combines items like gasoline, electricity and fuel oil, rose 1.2% after surging 3.5% previously. Energy prices are 1.1% higher over the past 12 months.

  • Food prices were flat for a fifth straight month. Like in the previous month, a drop in food at home prices offset a gain in the price for food away from home. The cost of food fell 0.4% in the year to November.

Stripping the more volatile food and energy categories, so-called core consumer prices also climbed 0.2%, after 0.1% increases in each of the two previous months.

Within this core grouping, shelter prices rose 0.3%. Components of shelter include pricing items like rent, rental equivalence, lodging away from home, and housing at school. Shelter prices are 3.3% higher than 12 months ago.

"The shelter index accounted for most of the (core) increase," the Labor Department’s report said, but also rising were "indexes for motor vehicle insurance (1%), education (0.2%), communication (0.2%), and used cars and trucks (0.3%)."

Meanwhile, declining items included clothing (-0.5%), new vehicles (-0.1%), and airfare (-1.3%).

U.S. inflation advanced 1.7% in the 12 months through November, the biggest year-on-year increase since October 2014. It follows the 1.6% increase for the 12 months ended October. As recently as July, the pace of annual inflation was as low as 0.8%.

"Inflation’s been firming for a little while," Bloomberg News quoted Gennadiy Goldberg, interest-rate strategist at TD Securities LLC in New York. "Given what the Fed was saying yesterday about slack being diminished, this basically works in their favor."

In rounding out the Labor Department’s report, core U.S. inflation climbed 2.1% on an annual basis, matching the level in the prior 12-month stretch. Items to rise quickest over the last year include motor vehicle insurance (6.7%), medical care (4%), and shelter (3.6%).

The core annual reading is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate.

"As the transitory influences of earlier declines in energy prices and prices of imports continue to fade, and as the job market strengthens further, we expect overall inflation to rise to 2% over the next couple of years," Fed Chairwoman Janet Yellen said in a press conference held Wednesday, December 14.

Inflation data below is for the last seven months through November, as published by the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi). To get the data, the BLS monitors prices of consumer goods and services from around the nation — about 80,000 items each month. They are continually collected, analyzed and then summarized in monthly reports. The data below offers the monthly and latest annual changes in percentages.

May to November 2016 Consumer Prices – Gains & Losses in Percent

  May 2016 June 2016 July 2016 Aug 2016 Sept 2016 Oct 2016 Nov 2016 12 Month
All items 0.2 0.2 .0 0.2 0.3 0.4 0.2 1.7
  Food -0.2 -0.1 .0 .0 .0 .0 .0 -0.4
    Food at home -0.5 -0.3 -0.2 -0.2 -0.1 -0.2 -0.1 -2.2
    Food away from home 0.2 0.2 0.2 0.2 0.2 0.1 0.1 2.3
  Energy 1.2 1.3 -1.6 .0 2.9 3.5 1.2 1.1
    Energy commodities 2.4 3.3 -4.4 -0.9 5.5 6.7 2.5 0.8
      Gasoline (all types) 2.3 3.3 -4.7 -0.9 5.8 7.0 2.7 1.0
      Fuel oil 6.2 3.3 -1.3 -2.5 2.4 5.9 -1.2 -2.0
    Energy services 0.2 -0.5 1.0 0.8 0.7 0.5 -0.1 1.5
      Electricity -0.2 -0.5 0.5 0.5 0.7 0.4 .0 0.2
      Utility (piped) gas service 1.7 -0.4 3.1 2.1 0.8 0.9 -0.4 6.2
  All items less food, energy 0.2 0.2 0.1 0.3 0.1 0.1 0.2 2.1
    Commodities less food, energy -0.2 -0.3 -0.1 0.1 -0.1 0.1 -0.3 -0.7
      New vehicles -0.1 -0.2 0.2 .0 -0.1 0.2 -0.1 0.2
      Used cars and trucks -1.3 -1.1 -1.0 -0.6 -0.3 -0.1 0.3 -3.8
      Apparel 0.8 -0.4 .0 0.2 -0.7 0.3 -0.5 0.3
      Medical care -0.4 0.8 0.5 1.4 0.6 0.1 -0.5 4.3
    Services less energy 0.3 0.3 0.2 0.3 0.2 0.2 0.3 3.0
      Shelter 0.4 0.3 0.2 0.3 0.4 0.4 0.3 3.6
      Transportation 0.3 0.3 -0.2 0.1 .0 -0.2 0.4 2.5
      Medical care 0.5 0.2 0.5 1.0 .0 .0 0.2 3.9

 

The BLS publishes inflation data around the middle of a month based on consumer prices surveyed through to the previous month. The Consumer Price Index (CPI) for December and over the latest 12-month or annual period becomes public on January 18, 2017.

CPI data is used in calculating inflation rates and in this site’s inflation calculator. The US Inflation Calculator on the homepage shows accumulated inflation and the change in buying power of the U.S. dollar over time.

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