WASHINGTON (MaceNews) – Transitory noise from plummeting gasoline prices overwhelmed the broadly moderate gains in November’s Consumer Price Index report Wednesday and promises to do the same in the current month.
The “all items” index was unchanged after going up 0.3% in October but the core reading without energy and food was up 0.2% in November.
Gasoline alone was down 4.2% in the one month. Without that one category, the seasonally adjusted overall CPI would also have been up a more normal 0.2%, the Bureau of Labor Statistics’s Steve Reed, who assembles the final report, told Mace News.
Annualized, the consumer inflation rate was 2.2% through November, decelerated from the 2.5% through the previous month. Core CPI was also 2.2% for the year.
The November reading for the inflation index to which the Federal Reserve pays more attention, for Personal Consumption Expenditures, won’t be released until very late in the month. It has been running at an annualized 2.0% through October. Core PCE was up an annual 1.8%. PCE is not dominated by direct housing costs as is the CPI.
The flywheel of the CPI, shelter pricing, was up 0.3% and the two rents indexes were up 0.3% and 0.4%, all the kind of typical readings that have kept the CPI’s monthly increases to 0.3% or less – mostly less – all year with the exception of January’s half-point rise. Housing in total makes up 41.8% of the CPI.
CPI commodities prices dropped 0.3% and for 12 months are up just 1.2%. Services prices including rents, up 0.2% in November – and which comprise 63% of the CPI – are up 2.7% for the year through November.
Inflation for producers at wholesale and retail for November was measured Tuesday by the BLS. The Producer Price Index rose a weak 0.1%, with services prices that contribute most of the report’s data points up 0.3%. Goods prices fell 0.4%.