U.S. Consumer Prices Inch Slightly Higher In November, Annual Growth Slows

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Consumer prices in the U.S. inched up by less than expected in the month of November, according to a highly anticipated report released by the Labor Department on Tuesday.

The Labor Department said its consumer price index crept up by 0.1 percent in November after climbing by 0.4 percent in October. Economists had expected consumer prices to rise by 0.3 percent.

The report also showed the annual rate of growth by consumer prices slowed to 7.1 percent in November from 7.7 percent in October.

The year-over-year increase in November, which came in below expectations for a slowdown to 7.3 percent, reflects the slowest annual growth since December 2021.

The monthly uptick in consumer prices was largely due to a continued advance by prices for shelter, which climbed by 0.6 percent in November following a 0.8 percent increase in October.

Food prices also rose by 0.5 percent in November after advancing by 0.6 percent in October, reflecting higher prices for both food at home and food away from home.

Meanwhile, the report said energy prices tumbled by 1.6 percent in November after jumping by 1.8 percent in October, as gasoline prices pulled back sharply.

"With gasoline prices collapsing over the past few weeks, headline CPI will show an outright decline in December," predicted Paul Ashworth, Chief North America Economist at Capital Economics.

He added, "The Fed could dismiss the better-than-expected October as just one month's data, but the further slowdown in November makes this new disinflationary trend harder to dismiss."

Excluding food and energy prices, core consumer prices edged up by 0.2 percent in November after rising by 0.3 percent in October. Core prices were expected to show another 0.3 percent increase.

The annual rate of growth by core consumer prices slowed to 6.0 percent in November from 6.3 percent in October, while economists had expected price growth to slow to 6.1 percent.

The modest monthly increase in core prices reflected the increase in prices for shelter as well as higher prices for communication, recreation, motor vehicle insurance, education and apparel.

Meanwhile, lower prices for used cars and trucks, medical care, and airline fares helped limit the upside for core prices.

A separate report released by the Labor Department last Friday showed U.S producer prices increased by more than expected in the month of November.

The Labor Department said its producer price index for final demand rose by 0.3 percent in November, matching upwardly revised increases in October and September.

Economists had expected producer prices to inch up by 0.1 percent compared to the 0.2 percent uptick originally reported for the previous month.

Meanwhile, the report showed the annual rate of producer price growth slowed to 7.4 percent in November from 8.1 percent in October, in line with economist estimates.

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