The consumer price index (CPI-U) fell 0.6% last month, posting the largest m/m decline since a 0.8% drop in July of 1949. Sharply lower gasoline prices and tame "core" goods prices caused the figure to exceed Consensus expectations for a 0.4% fall.

Prices less food & energy rose 0.2% in November and matched Consensus expectations. Core goods prices fell 0.1%, mostly due to a large 1.6% (NSA, -15.5% y/y) decline in computer & peripheral equipment prices. New & used vehicle prices also fell by 0.3% but it was due mostly to a 0.9% drop in used vehicle prices.

Pricing of many other goods was fairly firm. A 0.7% gain in furniture & bedding offset a 0.6% decline in appliance prices. Medical care commodity prices rose 0.6% (3.3% y/y) while educational books & supplies also rose 0.6% (5.4% y/y). Apparel prices rose 0.2% (-1.2% y/y) and tobacco prices rose 0.4% (6.1% y/y).

Core services prices increased 0.4% reflecting price gains of 0.6% (4.8% y/y) for medical care and 0.6% (6.2% y/y) for school tuition & fees. Shelter prices rose 0.3% (2.5% y/y) but public transportation prices were unchanged (5.9% y/y).

Energy prices fell 8.0% due to a 16.0% decline in gasoline prices to an average $2.26 per gallon (+16.1% y/y). Gasoline prices have fallen further in December to an average $2.17 while fuel oil prices also fell last month by 4.3% (+24.1% y/y. The bugger was a 2.1% rise in piped gas & electricity prices (19.8% y/y). A surprising 0.5% m/m decline (36.2% y/y) in natural gas prices will not likely be repeated given the rise in gas prices to record heights this month. Electricity prices rose 3.8% (11.3% y/y) in November.

The chained CPI which adjusts for shifts in the mix of consumer purchases fell 0.5% and less food & energy chain prices rose 0.3%.

Trend Inflation, Firm-Specific Capital, and Sticky Prices from the Federal Reserve Bank of Richmond can be found here.