U.S. Inflation Eases Again with November CPI at 7.1%

The annual rate of inflation slowed for a second straight month as consumer prices rose less than expected a U.S. government report for November showed.

Food and energy costs continued to burden American consumers, but prices for many other goods and services gave ground and, in some cases, declined.

In the headline monthly figure, U.S. consumer prices edged up 0.1% in November following two consecutive 0.4% increases, the Labor Department said Tuesday, Dec. 13, in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from clothing to cars. The figure compares to reported forecasts for a 0.3% increase.

Food prices for the month eased a tad — up 0.5% from 0.6%. Within the category, grocery prices climbed 0.5% versus 0.4% previously, while the cost of eating out rose 0.5% following three 0.9% monthly increases.

Food inflation year-over-year advanced 10.6% compared to 10.9% previously. In the 12 months ended August, the rate at 11.4% was the highest since April 1979.

Prices for groceries year-over year rose 12% against 12.4%. They jumped 13.5% in the annual period ending in August, which was the most since March 1979. Prices for foods consumed outside of the home rose 8.5% from 8.6%.

Prices at the pump declined 2% in November after swinging 4% higher in October, bringing their year-on-year increase to 10.1%. This year’s high-water mark happened in the 12 months ending June when gasoline inflation at 59.9% was the highest since March 1980.

The broader index for energy, which combines items like gasoline, electricity, and fuel oil, fell 1.6% for the month after rising 1.8%. Energy costs increased 13.1% from a year earlier, slowing from the previous 17.6% annual rise.

Excluding the more volatile food and energy components, the rate of core consumer prices rose 0.2% in November, the smallest gain since August 2021, after rising 0.3% in October.

Shelter or housing prices for the month eased to 0.6% from 0.8%. However, year-over-year they jumped 7.1% for their biggest 12-month increase since July 1982.

Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. This index accounts for about one-third of the entire CPI.

Compared to a year earlier, airline fares increased 36% from 42.9%. They edged 0.6% lower in November. For some recent monthly comparisons, they registered increases as high as 12.6% in May and 18.6% in April, which was the largest 1-month gain since the inception of the series in 1963.

In other pricing categories:

  • Clothing prices fell for a second month in a row, down 0.2% after falling 0.7%. They increased 3.6% from a year ago.
  • New vehicle prices were flat after climbing 0.4% in October, while they increased 7.2% year-over-year. Prior to November, they had registered eighteen monthly advances in nineteen months.
  • Used car and truck prices registered their first year-on-year decline since July 2020, falling 3.3%. They dropped 2.9% in November, for their fifth straight monthly fall. As recently as February, they had logged a year-on-year increase of 41.2%.

As for the headline annual figure, inflation rose 7.1% over the past 12 months compared to the previous 7.7% increase. This year’s high-water mark happened in the 12-months ending July at 9.1%, which marked the fastest rate of inflation since November 1981. Inflation rates have topped 6% for fourteen straight months, and they have been at or above 7% for twelve months in a row.

Meanwhile, core inflation advanced 6% over the past year against 6.3% previously. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it guides the central bank when setting its key interest rate. In the 12 months ending September, the core rate at 6.6% was the highest since August 1982.

“The broad improvements raise hopes price pressures are easing and the Fed will not have to tighten as much next spring,” Reuters quoted Will Compernolle, a senior economist at FHN Financial in New York. “But it is still not quite the ‘compelling’ inflation improvement (Fed Chair Jerome) Powell needs to be convinced the Fed can pause soon.”

The following table of key inflation figures is for the last seven months through November, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on Dec. 13, 2022. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

May 2022 to November 2022 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted from Prior Month and Unadjusted 12-Month)

  May 2022 June 2022 July 2022 Aug 2022 Sept 2022 Oct 2022 Nov 2022 12 Month
All items 1.0 1.3 .0 0.1 0.4 0.4 0.1 7.1
  Food 1.2 1.0 1.1 0.8 0.8 0.6 0.5 10.6
    Food at home 1.4 1.0 1.3 0.7 0.7 0.4 0.5 12.0
    Food away from home 0.7 0.9 0.7 0.9 0.9 0.9 0.5 8.5
  Energy 3.9 7.5 -4.6 -5.0 -2.1 1.8 -1.6 13.1
    Energy commodities 4.5 10.4 -7.6 -10.1 -4.7 4.4 -2.0 12.2
      Gasoline (all types) 4.1 11.2 -7.7 -10.6 -4.9 4.0 -2.0 10.1
      Fuel oil 16.9 -1.2 -11.0 -5.9 -2.7 19.8 1.7 65.7
    Energy services 3.0 3.5 0.1 2.1 1.1 -1.2 -1.1 14.2
      Electricity 1.3 1.7 1.6 1.5 0.4 0.1 -0.2 13.7
      Utility (piped) gas service 8.0 8.2 -3.6 3.5 2.9 -4.6 -3.5 15.5
  All items less food, energy 0.6 0.7 0.3 0.6 0.6 0.3 0.2 6.0
    Commodities less food, energy 0.7 0.8 0.2 0.5 0.0 -0.4 -0.5 3.7
      New vehicles 1.0 0.7 0.6 0.8 0.7 0.4 0.0 7.2
      Used cars and trucks 1.8 1.6 -0.4 -0.1 -1.1 -2.4 -2.9 -3.3
      Apparel 0.7 0.8 -0.1 0.2 -0.3 -0.7 0.2 3.6
      Medical care 0.3 0.4 0.6 0.2 -0.1 0.0 0.2 3.1
    Services less energy 0.6 0.7 0.4 0.6 0.8 0.5 0.4 6.8
      Shelter 0.6 0.6 0.5 0.7 0.7 0.8 0.6 7.1
      Transportation 1.3 2.1 -0.5 0.5 1.9 0.8 -0.1 14.2
      Medical care 0.4 0.7 0.4 0.8 1.0 -0.6 -0.7 4.4

 

The BLS releases inflation data around the middle of a month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for December and the latest annual period become public on Jan. 12, 2023.

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

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