Economy in Brief

Consumer price inflation continues to ease. The November Consumer Price Index edged 0.1% higher during November versus expectations for a 0.3% gain. The 7.1% y/y increase is down from a peak 9.1% y/y rise in June. The latest gain followed two months of 0.4% increase. The CPI less food & energy also exhibited weakness as it rose 0.2% versus an expected 0.3% rise. The y/y rise decelerated to 6.0% from a peak 6.6% in September. The gain came after rising 0.3% in October.

A 1.6% decline (+13.1% y/y) in energy prices provided downward pressure on last month’s CPI as it came after a 1.8% October increase. Gasoline prices fell 2.0% (+10.1% y/y) after a 4.0% increase. Fuel oil prices rose 1.7% (65.7% y/y) after strengthening 19.8%. Electricity prices eased 0.2% (+13.7% y/y) after rising 0.1% while natural gas prices fell 3.5% (+15.5% y/y) following a 4.6% October decline.

Amongst other component categories, there were offsetting pressures during November. Goods prices excluding food & energy fell 0.5% (3.7% y/y) after falling 0.4% in October. Used car & truck prices declined 2.9% (-3.3% y/y) after sharp declines in each of the prior two months. New car & truck prices held steady (7.2% y/y) after rising 0.4% in October and apparel prices rose 0.2% (3.6% y/y) following two months of decline.

For consumer services, prices rose 0.4% (6.8% y/y) following a 0.5% increase. Shelter prices rose 0.6% (7.1% y/y) after a 0.8% gain. Rent prices rose 0.8% (7.9% y/y) after a 0.7% gain while owners’ equivalent rent of primary residences rose 0.7% (7.1% y/y) after increasing 0.6% in October. Medical care service costs fell 0.7% (+4.4% y/y) after a 0.6% October decline while recreation services prices rose 1.0% (5.4% y/y) after a 0.8% October rise. Transportation service costs eased 0.1% (+14.2% y/y) as airline fares fell 3.0% (+36.0% y/y) following a 1.1% October decline.

On the food price front, overall costs rose 0.5% (10.6% y/y) after a 0.6% rise in October. Egg prices strengthened 2.3% (49.1% y/y) after surging 10.1% in October while dairy prices improved 1.0% (16.4% y/y) after easing 0.1%. The cost of fresh fruits & vegetables rose 1.4% (9.7% y/y) after a 0.9% October decline. Offsetting these gains, meat, poultry & fish prices fell 0.4% (+4.3% y/y) after easing 0.1% in October. Nonalcoholic beverage prices improved 0.7% (13.2% y/y) after rising 0.5% in October.

The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.