A drop in prices at the gas pump helped U.S. consumers pay less for goods and services during November, according to the latest report from Washington. The Labor Department said that its Consumer Price Index (CPI) declined by a seasonally adjusted 0.3 percent during the month with gasoline prices making-up most of the 4.1 percent drop in energy prices. The gas index dove by 7.4 percent in November, its largest drop in 47 months. Offsetting cheaper gas was a rise in electricity costs, its fourth straight month of increases.
Compared to 12 months ago, energy prices are 0.3 percent higher at the end of November.
Food prices have risen 1.8 percent compared to November 2011 adding in the 0.2 percent climb last month. Every component of the food index rose in November except for poultry and meat.
Core prices, those that don’t include volatile food and energy prices, nudged upward by 0.1 percent during November. Economists tend to pay more attention to core consumer prices as a barometer for inflation. On a yearly basis, the core CPI is up by 1.9 percent from last November, slightly lower than the 2.0 percent figure in October.
Overall inflation, which is similar to core CPI, but factored differently, is up 1.8 percent in the last year. Fed Chairman Ben Bernanke explained yesterday that the Fed will keep interest rates at historic lows until the unemployment rate contracts to at least 6.5 percent as long as inflation forecasts remain near their target of 2 percent. According to Big Ben, this will mean that the short-term interest will remain near zero into 2015.
The report stated that Hurricane Sandy had little effect on data collection or survey response.
Just after the opening bell, the markets are mixed with the Dow Jones up 10 points, the Nasdaq down 10 points and the S&P 500 down 2 points as fiscal cliff talks remain the focus of investor’s attention.