WASHINGTON — U.S. consumer
prices were unchanged in November, the best performance since prices
actually fell eight months ago. The docile inflation reading
reflected a big drop in the cost of gasoline and other energy
The Labor Department said Wednesday that the unchanged inflation
reading last month followed a 0.3 percent jump in prices in October.
It was the lowest reading since consumer prices actually fell 0.1
percent in March. Core inflation, which excludes volatile energy and
food prices, rose 0.2 percent in November.
Over the past 12 months, consumer prices have risen 2.2 percent, and
core prices are also up 2.2 percent. That is close to the Federal
Reserve's 2 percent target for annual price gains.
The Federal Reserve meets next week and is expected to boost its
benchmark rate for a fourth time this year. The Fed has been raising
rates to make sure that the lowest unemployment in nearly five
decades does not start pushing inflation higher. President Donald
Trump has sharply criticized those rate hikes, calling them a threat
to the economic recovery and unnecessary since inflation has
The Fed has projected another three rate hikes in 2019. But given
recent comments by Fed Chairman Jerome Powell and other Fed
officials, economists say the central bank may be contemplating
fewer rate hikes next year, given that inflation has stayed low and
there are signs that the economy is slowing.
"The recent softening in core inflation won't prevent the Fed from
raising interest rates again next week," said Andrew Hunter, U.S.
economist at Capital Economics. "But it does suggest that the Fed
won't hesitate to move to the side-lines if activity growth begins
to slow more sharply."
For November, energy prices dropped 2.2 percent after a 2.4 percent
jump in October. Energy prices have been falling sharply over the
past month, reflecting sharp declines in global oil prices which
have plunged from $75 per barrel in early October to near $50 per
The nationwide average pump price for gas is $2.41 currently, down
from $2.69 a month ago, according to motor club AAA. That is the
lowest price of this year with pump prices at their lowest points
since mid-December of last year. The sharp fall in global crude oil
has prompted the oil cartel OPEC to plan production cuts to boost
Food costs edged up 0.2 percent in November, a modest gain that left
food costs just 1.4 percent higher than a year ago.
New car prices were unchanged in November and up only 0.3 percent
over the past 12 months. Used car prices have been rising faster, up
2.4 percent in November and 2.3 percent higher than November 2017.