Underlying inflation pressures rose in November even as renewed weakness in gasoline prices kept overall U.S. consumer prices in check, which could give the Federal Reserve more ammunition to raise interest rates on Wednesday.
The Labor Department said on Tuesday its so-called core Consumer Price Index, which excludes food and energy, increased 0.2 percent last month. It was the third straight month that the core CPI increased by 0.2 percent.
In the 12 months through November, the core CPI rose 2.0 percent, the largest gain since May 2014, after rising 1.9 percent in October.
The increase in core CPI reflected steady gains in the cost of rents, airline fares, new motor vehicles and medical care. They were, however, offset by falling gasoline prices, leaving the overall CPI unchanged last month after a 0.2 percent increase in October.
In the 12 months through November, the CPI increased 0.5 percent, the largest gain since last December, after rising 0.2 percent in October. The Fed targets 2 percent inflation and it tracks an index that is running far below the core CPI.
The report was released just hours before Fed officials were due to gather for a two-day meeting. The U.S. central bank is expected to lift its benchmark overnight interest rate from near zero at the end of the meeting on Wednesday, encouraged by tightening labor market conditions.