Consumer prices were flat in November as a decline in fuel prices was offset by rising food prices, signaling that inflation is cooling and giving the Federal Reserve more room to enact policies to aid in the economic recovery.
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The U.S. Department of Labor reported on Friday that its Consumer Price Index was unchanged last month. Economists had expected a 0.1 percent rise.
Prices rose 3.4 percent in the 12 months through November, off from a 3-year high of 3.9 percent in September. The figures support a view expressed earlier this week by the Federal Open Market Committee that inflation is easing, opening up the possibility of additional monetary policy accommodation by the Fed.
However, some of the data in today’s report could give policymakers cause for concern. Core prices, which exclude volatile food and energy prices, climbed 0.2 percent in November, and were up 2.2 percent in the 12 months through November, more than the 2.1 percent in October.
Gasoline fell 2.4 percent, while prices for new vehicles were down 0.3 percent, offsetting gains elsewhere. Meanwhile, food prices rose 0.1 percent, while prices for apparel, which are counted in the core index, jumped 0.6 percent.
The Fed left the door open for further easing after its last policy meeting, and most economists suspect the Fed may choose its next meeting on January 24-25 to take steps to bring down borrowing costs and stimulate growth.