Consumer inflation increased at the fastest pace in more than two years in November, and analysts said the report wouldn't sit well with the Federal
Reserve.
Consumer prices rose 0.8% in November, led by higher prices for gasoline, the Labor Department reported Friday.
But energy wasn't the entire story. Prices of apparel, drugs, housing, and airline fares also spiked. As a result, core inflation, which excludes food and energy prices, rose 0.3%, its biggest advance since January.
The figures raise concern that inflationary pressures are increasing and could limit the room for the Fed to cut interest rates to counter the expected economic slowing over the next few quarters.
…
The numbers were worse than expected. Economists were forecasting the CPI would climb 0.7% and the core rate would rise 0.2%, according to a survey conducted by MarketWatch.
Barry Ritholtz at The Big Picture puts yesterday’s retail sales in perspective:
Oh, and those Retail sales yesterday? Let's do some quick math: The monthly nominal sales data of plus 1.2%, when adjusted for inflation, was a much more modest 0.4% real. The huge 6.3% year-over-year surge I mentioned? Try a real number of 2%, after the 4.3% annual inflation.
Here are the CPI-U charts, with and without food and energy. Click on the graphs for a larger image.
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