· The consumer price index (CPI-U) rose 0.8% last month due to the surge in energy prices. The gain was the quickest since September of 2005, a month when higher energy prices similarly raised the index. A 0.6% rise in the November CPI had been expected by a Consensus of economists. The y/y gain in prices of 4.3% was its quickest since June of last year.

· Core consumer price inflation picked up slightly to 0.3% after five months of 0.2% increase. A 0.2% gain was the general expectation. The y/y increase of 2.3% was its quickest in six months and the three month rise, to 2.6% (AR), has shown acceleration this year.

· Energy prices soared 5.7%, the fastest rise since a 5.9% increase during March of this year. Those two gains were the quickest since an 11.8% surge in 2005. That was subsequently followed by m/m declines and/or more moderate gains in energy prices. Gasoline prices jumped 9.3% (37.1% y/y) last month but the weekly data already indicate a slight m/m decline in December. Prices for fuel oil & other fuels surged 11.9% (28.4% y/y) but natural gas & electricity prices rose just 0.7% (4.4% y/y).

· Food & beverage prices rose 0.3% (4.7% y/y) but that was enough to lift the y/y increase to its fastest since 1991. Prices of dairy products were notably strong and rose 0.6% (14.0% y/y). Prices for fruits & vegetable jumped 1.6% (4.5% y/y) but prices for meats, poultry & fish fell 0.1% (5.4% y/y).

· Core goods prices rose 0.2% after slight declines during each of the prior three months. Apparel prices surged 0.8% (-0.4% y/y) after having been unchanged in October. New & used motor vehicle prices were unchanged (-0.4% y/y) after two months of decline. Prices of household furnishings & operation rose a slight 0.1% (-0.7% y/y) after four straight months of decline. Tobacco prices increased 0.2% (8.2% y/y) for the second month but the y/y gain was its strongest since early 2003. The core CPI less tobacco rose 0.3% (2.3%).

· Core services prices rose 0.3% (3.2% y/y). Shelter prices increased 0.3% (3.1% y/y) and that y/y change was its slowest since early this year. Owners equivalent rent of primary residence, a measure not equivalent to other house price measures, rose 0.3%, reducing the y/y gain to 2.8% y/y. Since a low several months ago of 1.8%, the three month change has picked up to 3.4%, its firmest since January. Public transportation prices rose 1.8% (6.1% y/y) and medical care services prices rose 0.3% (5.8% y/y). Education service prices rose 0.6% (5.5% y/y) after a firm 0.7% October gain but communication prices fell (-0.1% y/y) for the second consecutive month.

 · A Comparison of Measures of Core Inflation from the Federal Reserve Bank of New York can be found here.

Consumer Price Index

September

Y/Y 

2006

2005

2004

Total 

4.3% 

3.2%

3.4%

2.7%

Total less Food & Energy

2.3% 

2.5%

2.2%

1.8%

Goods less Food & Energy

0.0% 

0.2%

0.5%

-0.9%

  Services less Energy

3.2% 

3.4%

2.8%

2.8%

Energy

21.3% 

11.1%

16.9%

10.8%

Food & Beverages

4.8% 

2.3%

2.4%

3.4%

Chained CPI: Total (NSA) 

3.6%

2.8%

2.9%

2.5%

 Total less Food & Energy 

2.0%

2.3%

1.9%

1.7%