US Inflation Flat in November as Gasoline Prices Decline

American consumers caught some overall pricing breaks in November, their first in eight months, but underlying inflation remained firm, according to government figures released Wednesday, Dec. 12, 2018.

Americans spent less last month for gas and clothing but more for housing, food, medical care, and used cars. Most everything was higher than a year ago.

U.S. consumer prices were unchanged in November, snapping a string of seven straight gains and after advancing 0.3% in October, the Labor Department said in its monthly report on the Consumer Price Index. The CPI is a broad measure of what Americans pay for everything from coffee to cars.

In key pricing categories:

  • Prices at the pump declined 4.2% last month after jumping 3% previously. Gasoline prices increased 5% from November 2017. The broader index for energy, which combines items like gasoline, electricity and fuel oil, fell 2.2% in November after rising 2.4% in October. The Labor Department’s report shows energy prices rose 3.1% year-over-year — the smallest 12-month increase since the period ending June 2017, and compared to 8.9% previously.

  • Overall food prices moved up 0.2% in November after sliding 0.1% in October. Food prices rose 1.4% over the last 12 months, their fifth such gain in the last five inflation reports.

Excluding the more volatile food and energy components, so-called core consumer prices climbed 0.2% in November, matching their increase in October.

"Along with the indexes for shelter and used cars and trucks, the indexes for medical care, recreation, and water and sewer and trash collection also increased," the report noted, while the "indexes for wireless telephone services, airline fares, and motor vehicle insurance declined."

Shelter or housing costs rose 0.3% last month following two consecutive increases of 0.2%. The index again ran at a pace of 3.2% year-over-year. 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. The index accounts for about one-third of the entire CPI.

In the headline figure, U.S. inflation rose 2.2% for the 12 months ending November. That compares to its 2.5% increase in the period ending October. In other inflation comparisons for the year, rates hit a low of 2.1% in January and peaked to 2.9% in both June and July — the highest inflation levels since February 2012.

Core inflation also advanced 2.2% from a year earlier — up some from the 2.1% increase for the 12-month period ending October. July remains the standout month this year so far with its 2.4% increase, the quickest core rate since September 2008. Until March, the 12-month rate had held at either 1.7% or 1.8% for 10 straight months. 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 its key interest rate.

While the CPI report "cements a rate hike next week," the Fed "will have a window to pause in the first half of 2019," Bloomberg News quoted Ryan Sweet, head of monetary policy research at Moody’s Analytics Inc. in West Chester, Pennsylvania. "Risks to the Fed’s inflation outlook are weighted to the downside" amid falling energy costs and sliding price expectations, which indicate that "inflation isn’t going to create any more sense of urgency for future hikes," he said.

The following table of key inflation figures is for the last nine months through November, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on December 12, 2018. 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 to November 2018 Consumer Prices – Gains & Losses in Percent

  May 2018 June 2018 July 2018 Aug 2018 Sept 2018 Oct 2018 Nov 2018 12 Month
All items 0.2 0.1 0.2 0.2 0.1 0.3 .0 2.2
  Food .0 0.2 0.1 0.1 .0 -0.1 0.2 1.4
    Food at home -0.2 0.2 0.2 .0 -0.1 -0.2 0.2 0.4
    Food away from home 0.3 0.2 0.1 0.2 0.2 0.1 0.3 2.6
  Energy 0.9 -0.3 -0.5 1.9 -0.5 2.4 -2.2 3.1
    Energy commodities 1.6 0.6 -0.6 3.0 -0.2 2.9 -4.1 5.4
      Gasoline (all types) 1.7 0.5 -0.6 3.0 -0.2 3.0 -4.2 5.0
      Fuel oil -0.7 2.9 1.2 2.2 0.3 3.7 -2.9 16.1
    Energy services -0.1 -1.5 -0.4 0.4 -0.8 1.7 0.4 .0
      Electricity 0.1 -1.4 -0.4 0.3 -0.5 2.3 0.3 0.6
      Utility (piped) gas service -0.6 -1.7 -0.5 0.9 -1.7 -0.6 0.7 -2.1
  All items less food, energy 0.2 0.2 0.2 0.1 0.1 0.2 0.2 2.2
    Commodities less food, energy -0.1 .0 0.1 -0.3 -0.3 0.3 0.2 0.2
      New vehicles 0.3 0.4 0.3 .0 -0.1 -0.2 .0 0.3
      Used cars and trucks -0.9 0.7 1.3 0.4 -3.0 2.6 2.4 2.3
      Apparel .0 -0.9 -0.3 -1.6 0.9 0.1 -0.9 -0.4
      Medical care 1.3 0.2 -1.1 -0.3 -0.1 -0.1 0.4 0.6
    Services less energy 0.3 0.2 0.3 0.2 0.2 0.2 0.2 2.9
      Shelter 0.3 0.1 0.3 0.3 0.2 0.2 0.3 3.2
      Transportation .0 0.2 0.5 0.3 0.5 0.1 -0.3 3.3
      Medical care -0.1 0.5 0.1 -0.2 0.2 0.2 0.4 2.4

 

The BLS tends to release inflation data around the middle of a month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for December and the latest annual period become public on January 11, 2019.

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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