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CPI: Core Moderates

December 13, 2017
Bottom Line: Headline consumer inflation rose in November as energy prices rose. Core CPI decelerated, though, coming in a bit below expectations with a slower rise in owner's equivalent rent, now up 3.3% annualized over the last 3 months, slower than the pace of the last 6- months, 3.4%, and just above the pace of the last 12 months, 3.2%. Overall price pressures remain modest at the core level with few signs of any acceleration in trend, despite some volatility in recent months.

The CPI ROSE by 0.4% in November, in-line with market expectations for an increase of 0.4%.

  • Food prices increased by 0.02% while energy prices rose by 3.9%.
  • Prices for gasoline rose by 7.3% while prices for fuel oil increased by 5.2%, prices for electricity climbed by 0.5%, and prices for natural gas rose by 0.6%.
  • Energy prices are now 9.5% ABOVE their year ago level.
  • Overall consumer prices are now 2.2% ABOVE their year ago level; in November 2016, consumer prices were 1.7% ABOVE their year ago level.

The Core CPI ROSE by 0.1%, compared with market expectations for an increase of 0.2%.

  • Prices for commodities excluding food and energy commodities fell by 0.1%.
  • Gains in used cars & trucks (+1.0%), medical care (+0.6%), were somewhat offset by declines in apparel (-1.3%).
  • Prices for services excluding energy services rose 0.2% with modest increase in owner's equivalent rent (+0.2%), shelter (+0.2%), and transportation (+0.1%).
  • Core consumer prices are now 1.7% ABOVE their year ago level; in November 2016, consumer prices were 2.1% ABOVE their year ago level.