The overall price of consumer goods didn’t change in November compared to October, according to the latest report from the Labor Department on Tuesday, signaling that inflation is remaining stubbornly slow to move towards the Federal Reserve’s annual target of 2 percent.
The Bureau of Labor Statistics said that the Consumer Price Index was unchanged last month after edging down 0.1 percent in October. Economists were expecting the CPI to rise by 0.1 percent in November. Compared to last November, the index was up 1.2 percent before seasonal adjustment.
Weighing on overall prices was a 1.0-percent drop in energy prices because of cheaper natural gas (-1.8%) and gasoline prices (-1.6%). It was the fifth decline in the last six months for the energy index, which contracted by 1.7 percent in October. Compared to November 2012, the energy index is down 2.4 percent.
The food index rose 0.1 percent in November, matching in rise a month earlier. Consumers paid less for fruits and vegetables, meets, poultry, fish, eggs and nonalcoholic beverages. Those cheaper prices were offset in part by a rise in dairy and related products (+0.4%). Overall, the food index has risen 1.2 percent in the past year.
So-called “core” CPI, which excludes the volatile energy and food sectors, increased by 0.2 percent in November, primarily because of a rise in costs for shelter and airline fares. Economists predicted core CPI to rise 0.1 percent. Year-over-year, core CPI is up 1.7 percent.
Pushing core CPI up were higher costs for renting a place to live (+0.2%) and the index for owners’ equivalent rent (+0.3%). Cost for lodging away from home increased 2.9 percent, while airlines charged 2.6 percent for a ticket, after bumping prices up 3.6 percent in October.
Stiff competition to get the attention of consumers has seen plenty of retailers running deep discounts and promotions, especially with the unofficial/official kick-off of the holiday shopping season last month. In that fold, the apparel index continued to decrease, falling 0.4 percent to mark the third straight monthly decline. Prices for household furnishings were down 0.2 percent. The new vehicle index slid 0.1 percent for the second consecutive month.
Inflation-adjusted hourly earnings (often called “real wages”) rose by 0.2 percent in November to $10.33. Since last November, real wages have risen just 0.9 percent, compared to 1.3 percent in October.