U.S. consumer prices were unchanged in November, held back by a sharp decline in the price of gasoline, but underlying inflation pressures remained firm amid rising rents and healthcare costs.
The Labor Department said on Wednesday that last month’s flat reading in its Consumer Price Index followed a 0.3 percent increase in October. It was the weakest reading in eight months.
In the 12 months through November, the CPI rose 2.2 percent, slowing from October’s 2.5 percent rise.
Excluding the volatile food and energy components, the CPI increased 0.2 percent, matching October’s gain. In the 12 months through November, the so-called core CPI increased 2.2 percent after climbing 2.1 percent in October.
Economists polled by Reuters had forecast the CPI unchanged and the core CPI gaining 0.2 percent in November.
While core prices remain firm, the inflation outlook is benign amid falling oil prices and signs of slowing economic growth both in the United States and overseas. A report on Tuesday showed producer prices edging up 0.1 percent in November after accelerating 0.6 percent in October.
The Federal Reserve’s preferred inflation measure, the core PCE price index excluding food and energy, increased 1.8 percent year-on-year in October, the smallest gain since February, after rising 1.9 percent the prior month. It hit the U.S. central bank’s 2 percent target in March for the first time since April 2012.
The Fed is expected to raise interest rates for the fourth time this year next Wednesday.
Minutes of the Fed’s November policy meeting published last month showed nearly all officials agreed another rate hike was “likely to be warranted fairly soon,” but also opened debate on when to pause further monetary policy tightening.
In November, gasoline prices tumbled 4.2 percent after rebounding 3.0 percent in October. With oil prices falling sharply since October on signs of an economic slowdown, gasoline could become even cheaper. Brent crude oil prices have dropped almost 30 percent.
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Food prices rose 0.2 percent after dipping 0.1 percent in October. Food consumed at home gained 0.2 percent in November after dropping for two straight months.
Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.3 percent in November after a similar gain in October.
Healthcare costs jumped 0.4 percent last month after rising 0.2 percent in October. There were strong increases in the costs of hospital services and prescription medication.
Apparel prices dropped 0.9 percent after ticking up 0.1 percent in October. There were also decreases in the prices of wireless telephones services, airline fares and motor vehicle insurance.