US inflation declined in November for the first time in six months as sharply lower gasoline prices offered American consumers some relief, newly released data from the US government shows.
Consumer prices fell 0.3 percent in November after rising 0.1 percent in the previous month. Economists expected an easing but pegged the likely number at minus 0.2 percent. The first decline since May was mostly attributed to a 7.4 percent drop in prices at the pump, the US Labor Department indicated Friday, December 14, 2012 in its monthly Consumer Price Index (CPI) report.
Cheaper gasoline offset higher prices in other categories such as food, which rose 0.2 percent for a second straight month.
Stripping out volatile food and energy prices, the so-called core US inflation rate rose 0.1 percent in November after advancing 0.2 percent in October.
Other US government-tracked pricing categories to rise last month included:
- 0.2 percent increases for new vehicles, shelter and transportation
- 0.3 percent advance in medical care services
- 1.4 percent rise in airline fares
- 0.3 percent increase for cereals and bakery products
- 0.2 percent advance for fruits and vegetables
Items retreating in price included 0.5 percent for used cars and 0.6 percent for clothing. Additionally, the US Labor Department noted:
"The index for meat, poultry, fish, and eggs was the only major grocery store food group to decline, falling 0.1 percent in November after rising 0.8 percent in October."
Over the past 12 months, US inflation advanced 1.8 percent compared to the increase of 2.2 percent in October.
Core US inflation rose 1.9 percent year-over-year through November versus the prior 2.0 percent. This is the US inflation rate watched closely by the Federal Reserve as it helps decide where the central bank sets its key interest rate.
"The inflationary backdrop remains very benign, providing the Fed with considerable breathing room to keep monetary policy accommodative," Reuters quoted Millan Mulraine, senior economist at TD Securities in New York.
The Federal Reserve’s target inflation rate is 2.0 percent. Sating that, the Fed said Wednesday, December 12, 2012 that it intends to keep its key short-term interest rate near zero until the US unemployment rate is 6.5 percent or lower.
"The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."
Monthly US Labor Department inflation data from May through November and year-over-year is listed within the following table.
May – November 2012 Consumer Prices – Gains in Percent
|June 2012||July 2012||Aug 2012||Sept 2012||Oct 2012||Nov 2012||12
|Food at home||-0.1||0.1||.0||0.1||.0||0.3||0.3||1.3|
|Food away from home||0.2||0.2||0.2||0.3||0.2||0.1||0.1||2.6|
|Gasoline (all types)||-6.8||-2.0||0.3||9.0||7.0||-0.6||-7.4||1.9|
|Utility (piped) gas service||-4.1||1.7||-0.2||2.8||2.0||-0.2||1.3||-4.7|
|All items less food, energy||0.2||0.2||0.1||0.1||0.1||0.2||0.1||1.9|
|Comm. less food, energy||0.2||0.2||.0||-0.2||-0.2||-0.1||-0.1||0.5|
|Used cars and trucks||1.0||.0||-0.5||-0.9||-1.4||-0.9||-0.5||-2.3|
|Services less energy||0.2||0.2||0.1||0.1||0.3||0.3||0.2||2.5|
The US Labor Department will release Consumer Price Index data for December 2012 on January 16, 2013 at 8:30 AM ET. The CPI is used as the core data for this site’s US Inflation Calculator.