U.S. CPI Total & Core Slightly Above Expectations

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.

The chained CPI, which adjusts for shifts in the mix of consumer purchases rose 0.4% (3.6% y/y) but the core measure was unchanged. This latter measure is similar to the core PCE price index but its treatment of housing price differs

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

Consumer Price Index	November	October	September	Y/Y	2006	2005	2004
Total	0.8%	0.3%	0.3%	4.3%	3.2%	3.4%	2.7%
Total less Food & Energy	0.3%	0.2%	0.2%	2.3%	2.5%	2.2%	1.8%
Goods less Food & Energy	0.2%	-0.0%	-0.0%	0.0%	0.2%	0.5%	-0.9%
Services less Energy	0.3%	0.2%	0.3%	3.2%	3.4%	2.8%	2.8%
Energy	5.7%	1.4%	0.3%	21.3%	11.1%	16.9%	10.8%
Food & Beverages	0.3%	0.3%	0.5%	4.8%	2.3%	2.4%	3.4%
Chained CPI: Total (NSA)	0.4%	0.2%	0.3%	3.6%	2.8%	2.9%	2.5%
Total less Food & Energy	0.0%	0.3%	0.3%	2.0%	2.3%	1.9%	1.7%