November 2017 Consumer Price Index

Americans paid higher prices in November 2017 than a month earlier according to the Consumer Price Index (CPI) from the Bureau of Labor Statistics.  This measure of inflation rose 0.4 percent in the period and has gained 2.2 percent in the past twelve months.  Core-CPI, which strips out volatile food and energy components, rose 0.1 percent in November and has gained 1.7 percent in the past year.

Energy-related prices propelled the index higher.  After falling 2.4 percent in October, gasoline jumped 7.3 percent.  Fuel oil continued its streak of upticks, rising 5.0 percent after rising 2.3 percent or more in each of the prior three months.  Electricity’s increase was less shocking, elevating 0.5 percent, and piped gas services rose 0.6 percent.  Overall, energy prices are up 2.8 percent in the past year.

Other components of the CPI were mixed.  New vehicle costs rose 0.3 percent, and used autos increased 1.0 percent.  Apparel prices fell for a third consecutive month, dropping 1.3 percent.  Medical care commodities increased for the first time in four months, but medical care services declined marginally.  Finally, shelter continued getting more expensive, rising 0.2 percent in November and 3.2 percent in the past year.

Consumer inflation remains subdued, especially when considering the core measure.  The headline tally is slightly above the Federal Reserve’s explicit target of 2.0 percent on a year-over-year basis, but it is being led by the volatile energy components.  At this time, there is little evidence of an inflation issue in the American economy.  This will likely allow the Fed to maintain a steady upward path as it adjusts interest rates in the year ahead.