US Inflation Unchanged in November 2013, Annual Inflation Rate Rises

US inflation was unchanged in November from a month earlier as lower gasoline and natural gas prices offset what American’s had to pay for pricier items like food, shelter and transportation, this according to consumer price data published Tuesday by the government.

Annual inflation did bounce higher from the last reading, though that one went down as the smallest 12-month increase in four years. The bottom line, US inflation remains tame from the standpoint of economists and well under the Fed’s target.

No change in consumer prices in November follows a 0.1% decrease in October, the Bureau of Labor Statistics (BLS) noted in its monthly report on the Consumer Price Index (CPI) which measures how much Americans’ pay for certain goods and services. This inflation data is watched closely by economists, Federal Reserve policy-makers and investors. Forecasts by economists, according to Bloomberg News, Reuters and MarketWatch, had called for consumer prices to nudge up 0.1%.

In some specific categories monitored by the government:

  • Prices at the pump dropped 1.6% in November after decreasing 2.9% in October. Gasoline prices have fallen 5.8% from a year ago.
  • Groceries went up 0.1% for a second straight month with food prices rising 1.2% over the past year.
  • Natural gas prices declined 1.8% in November, the fifth decrease in the last six months, though they have increased 1% over the last year.
  • Trending higher, electricity went up 0.3% for a third straight monthly increase and has jumped 2.9% over the last year.

Stripping out the more volatile energy and food categories, so-called core consumer prices or the core rate of inflation in November advanced 0.2% after rising 0.1% in each of the prior three months. Most of the core gains, according to the BLS, came from shelter (up 0.3%) and airline fares (up 2.6%). Also higher were used vehicles (up 0.1%) and overall transportation costs (up 0.3%).

US inflation picked up 1.2% year-over-year through November. The annual inflation rate rose 1.0% during the 12 months ended October. Prior 12-month rates of inflation reported by the BLS for 2013 include increases of 1.2% by September, 1.5% by August, 2% by July, 1.8% by June, 1.4% by May, 1.1% by April, 1.5% by March, 2% by February and 1.6% by January.

Core US inflation over the last 12 months climbed 1.7% for a third month in a row. Earlier annual core inflation rates were reported at 1.8% in August, 1.7% in July, 1.6% in June, matching 1.7% in May and April, 1.9% in March, 2.0% in February and 1.9% in each of the three months before then.

"Core inflation is still running too low," said Laura Rosner, a U.S. economist at BNP Paribas SA in New York. BNP is the top-ranked forecaster of CPI in the past two years, according to data compiled by Bloomberg. "We probably have further weakness to see as retailers adjust prices to reduce the stockpiles that we know boosted growth."

The annual core inflation rate is the benchmark inflation figure monitored by the Federal Open Market Committee (FOMC) as it helps the committee decide where to set its key interest rate. The 1.7% increase remains under the Fed’s target inflation rate of 2%. The FOMC began its two-day monetary policy meeting today.

"Indeed, inflation is still a distance from the Fed’s 2 percent target and this is one report that would give the Fed reason to go easy on tapering," said Jennifer Lee, senior economist at BMO Capital Markets.

Published in the following grid are percent changes in prices for major consumer goods and services that are surveyed and analyzed by the US government (BLS). The time periods are from May through November, as well as over the past 12 months.

May 2012 – November 2013 Consumer Prices – Gains & Losses in Percent

  May 2013 June 2013 Jul 2013 Aug 2013 Sept 2013 Oct 2013 Nov 2013 12 Month
All items 0.1 0.5 0.2 0.1 0.2 -0.1 .0 1.2
  Food -0.1 0.2 0.1 0.1 .0 0.1 0.1 1.2
    Food at home -0.3 0.2 0.1 0.1 .0 0.1 .0 0.6
    Food away from home 0.2 0.2 0.2 0.2 0.1 0.1 0.3 2.1
  Energy 0.4 3.4 0.2 -0.3 0.8 -1.7 -1.0 -2.4
    Energy commodities -0.1 5.7 1.0 .0 0.9 -2.7 -1.5 -5.5
      Gasoline (all types) .0 6.3 1.0 -0.1 0.8 -2.9 -1.6 -5.8
      Fuel oil -2.9 -0.5 1.1 1.2 0.9 -0.6 0.4 -4.1
    Energy services 1.2 0.1 -1.0 -0.7 0.8 -0.2 -0.2 2.5
      Electricity 0.8 0.2 -0.3 -0.1 0.5 0.1 0.3 2.9
      Utility (piped) gas service 2.4 -0.4 -2.8 -2.3 1.8 -1.0 -1.8 1.0
  All items less food, energy 0.2 0.2 0.2 0.1 0.1 0.1 0.2 1.7
    Comm. less food, energy .0 0.2 .0 .0 -0.1 -0.1 -0.1 -0.2
      New vehicles .0 0.3 0.1 .0 0.2 -0.1 -0.1 0.6
      Used cars and trucks -0.1 -0.4 -0.4 -0.1 .0 0.3 0.1 2.0
      Apparel 0.2 0.9 0.6 0.1 -0.5 -0.5 -0.4 -0.1
      Medical care -0.5 0.5 0.4 0.4 0.1 0.3 .0 0.8
    Services less energy 0.2 0.2 0.2 0.2 0.2 0.2 0.3 2.4
      Shelter 0.3 0.2 0.2 0.2 0.2 0.1 0.3 2.4
      Transportation 0.4 -0.1 0.4 -0.5 0.3 0.7 0.3 2.6
      Medical care .0 0.4 0.1 0.7 0.3 -0.1 .0 2.6

 

The newest information on United States inflation is generally published by the Bureau of Labor Statistics about two weeks into a new month with the collection of pricing data completed by the end of the reference month. The BLS has scheduled the data release of December inflation in the form of the Consumer Price Index (CPI) on January 16, 2014.

CPI data is used to calculate inflation rates and it is used by this site’s Inflation Calculator. The calculator offers accumulated inflation and shows any changes in the buying power of the US dollar between two dates.

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