November 2014 US Inflation

U.S. consumer price inflation eased more than expected in November, actually dropping — and by the biggest amount in almost six years as gasoline prices plummeted to easily offset increases in other areas like food.

The Consumer Price Index declined 0.3% last month, the U.S. Labor Department reported Wednesday, December 17. The drop was the biggest since December 2008 and comes on the heels of a flat reading in October. Forecasts were at the 0.1% mark.

Tumbling gasoline prices led declines. They were 6.6% lower than the prior month and have fallen 10.3% from a year ago.

"The consumer is getting a well-deserved break," said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. "We’re seeing a little more wage growth, more jobs, better confidence and finally a price break at the pump. It adds up to a very strong holiday season."

In contrast, food prices have registered eleven consecutive monthly gains. They rose 0.2% in November and are 3.2% higher than the same time last year.

Stripping food and energy expenses, the so-called core inflation rate turned up 0.1% in November after climbing 0.2% previously.

Annual Change in Consumer Prices

In the November 2013 to November 2014 period, the inflation rate eased to 1.3% after three straight 1.7% increases. The core level rose 1.7% from 1.8% previously.

Below are most-watched consumer prices by category as well as their month-over-month changes. The final column offers year-over-year changes. The prices for these items are gathered and published by the Bureau of Labor Statistics (BLS) each month.

US Inflation: May – Nov 2014 Consumer Prices (%)

  May 2014 June 2014 July 2014 Aug 2014 Sept 2014 Oct 2014 Nov 2014 12 Month
All items 0.4 0.3 0.1 -0.2 0.1 .0 -0.3 1.3
  Food 0.5 0.1 0.4 0.2 0.3 0.1 0.2 3.2
    Food at home 0.7 .0 0.4 0.2 0.3 0.1 0.1 3.4
    Food away from home 0.2 0.2 0.3 0.2 0.3 0.2 0.4 2.9
  Energy 0.9 1.6 -0.3 -2.6 -0.7 -1.9 -3.8 -4.8
    Energy commodities 0.6 3.0 -0.3 -3.9 -1.1 -3.0 -6.4 -10.2
      Gasoline (all types) 0.7 3.3 -0.3 -4.1 -1.0 -3.0 -6.6 -10.5
      Fuel oil -1.4 -1.7 -0.7 -1.2 -2.1 -4.0 -3.5 -10.1
    Energy services 1.4 -0.4 -0.4 -0.6 -0.2 -0.2 -0.3 2.9
      Electricity 2.3 0.2 -0.3 0.1 -0.7 0.5 0.1 2.8
      Utility (piped) gas service -1.7 -2.6 -0.4 -2.8 1.6 -2.7 -1.7 3.2
  All items less food, energy 0.3 0.1 0.1 .0 0.1 0.2 0.1 1.7
    Commodities less food, energy 0.1 0.1 .0 -0.1 .0 .0 -0.4 -0.5
      New vehicles 0.2 -0.3 0.3 0.2 .0 0.2 -0.1 0.6
      Used cars and trucks -0.1 -0.4 -0.3 -0.3 -0.1 -0.9 -1.2 -3.1
      Apparel 0.3 0.5 0.2 -0.2 .0 -0.2 -1.1 -0.3
      Medical care 0.5 0.7 0.3 -0.1 0.5 .0 0.6 3.1
    Services less energy 0.3 0.1 0.1 .0 0.2 0.3 0.2 2.5
      Shelter 0.3 0.2 0.3 0.2 0.3 0.2 0.3 3.0
      Transportation 1.0 0.1 -0.7 -0.6 0.1 0.8 0.3 1.8
      Medical care 0.3 .0 0.1 .0 0.1 0.2 0.4 2.3

 

Next up is the summary report of the Consumer Price Index by the Labor Department’s BLS. It was published on Wednesday, December 17, 2014.

Summary of Consumer Prices for November 2014

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.3% in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.3% before seasonal adjustment.

The gasoline index posted its sharpest decline since December 2008 and was the main cause of the decrease in the seasonally adjusted all items index. The indexes for fuel oil and natural gas also declined, and the energy index fell 3.8%. The food index rose 0.2% with major grocery store food groups mixed.

The index for all items less food and energy increased 0.1% in November. The shelter index rose 0.3%, and the indexes for medical care, airline fares, and alcoholic beverages also rose. In contrast, the indexes for apparel, used cars and trucks, recreation, household furnishings and operations, personal care, and new vehicles all declined in November.

The all items index increased 1.3% over the last 12 months, a notable decline from the 1.7% figure from the 12 months ending October. The index for all items less food and energy has increased 1.7% over the last 12 months, compared to 1.8% for the 12 months ending October. The food index has risen 3.2% over the span. However, the energy index has declined 4.8% over the past 12 months, with the gasoline and fuel oil indexes both falling over 10%.

Food Inflation

The food index rose 0.2% in November after increasing 0.1% in October. The index for food at home rose 0.1% in November and has risen 3.4% over the past year. Indexes for major grocery store food groups were mixed in November, with three increases and three declines. The index for meats, poultry, fish, and eggs increased 0.6% in November after declining in October. The index for beef and veal rose 0.8%, its tenth consecutive increase.

The index for nonalcoholic beverages rose 0.5%, and the index for other food at home increased 0.4%. In contrast, the fruits and vegetables index turned down, falling 0.7% in November after a 0.9% increase in October. The index for fresh vegetables rose 1.8%, but the fresh fruits index fell 2.9%.

The indexes for dairy and related products and for cereals and bakery products both fell 0.2%. All six groups increased over the past 12 months, with increases ranging from 0.2% (cereals and bakery products) to 9.1% (meats, poultry, fish, and eggs.) The index for food away from home increased 0.4% in November, its largest increase since January 2012, and has risen 2.9% over the past year.

Energy Inflation

The energy index declined for the fifth month in a row, falling 3.8% in November. The gasoline index continued to decrease sharply, falling 6.6%. (Before seasonal adjustment, gasoline prices fell 8.9% in November.) The fuel oil index fell 3.5% in November, its ninth consecutive decline.

The gasoline index has fallen 10.5% over the last 12 months, and the fuel oil index has declined 10.1%. The index for natural gas also declined in November, decreasing 1.7%, but it has risen 3.2% over the last year. Electricity was the only major component index to rise in November; it increased 0.1% and has risen 2.8% over the past year.

All items less food and energy

The index for all items less food and energy rose 0.1% in November following a 0.2% increase in October. The shelter index rose 0.3%, with the rent index rising 0.3% and the index for owners’ equivalent rent increasing 0.2%. The index for lodging away from home was unchanged in November. The index for medical care rose 0.4% in November, its largest increase since August 2013.

The index for prescription drugs rose 0.6%, while the physicians’ services index increased 0.5%. The airline fares index increased 1.4% after a 2.4% increase in October. The index for alcoholic beverages rose as well, increasing 0.8%.

In contrast to these increases, the apparel index fell 1.1% and the index for used cars and trucks declined 1.2%. Several indexes posted more modest declines; the indexes for recreation, for household furnishings and operations, and for personal care all declined 0.2%, and the new vehicles index fell 0.1%.

The index for all items less food and energy has risen 1.7% over the last 12 months. The shelter index rose 3.0% over that span, and the index for medical care increased 2.5%. Several indexes have declined over the last 12 months, including airline fares, used cars and trucks, household furnishings and operations, and recreation.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3% over the last 12 months to an index level of 236.151 (1982-84=100). For the month, the index fell 0.5% prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.1% over the last 12 months to an index level of 231.551 (1982-84=100). For the month, the index fell 0.7% prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 1.0% over the last 12 months. For the month, the index fell 0.7% on a not seasonally adjusted basis. Please note that the indexes for the post-2012 period are subject to revision.

Next CPI Report

The Consumer Price Index report for December will be released on January 16, 2015 at 8:30 a.m. (EDT).

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