Consumer prices continued deflating in November, led by record declines in the price of gasoline. When gas and food prices are excluded, prices were unchanged in the month.
The seasonally adjusted U.S. Consumer Price Index saw its biggest monthly decline ever with a 1.7% drop in the all-items index for November, while core inflation was flat against expectations of a 0.1% decline, according to data released by the U.S. Labor Department on Tuesday.
There were no revisions to the prior month's data, which saw the all-items index fall 1.0% and core inflation drop 0.1%.
The flat core rate marks follows a -0.1% print in October and a +0.1% reading in September.
The annual core rate, which excludes volatile food and energy components, was pushed down two-tenths to 2.0%, in line with the Fed's unofficial target of 2.0%.
The consensus forecast for the all-items index was a 1.3% decrease. The annual rate for total inflation is now +1.1%, down from the +3.7% pace seen last month. This puts the annual gain to its lowest level since June 2002.
Energy prices fell a whopping 17.0% in November. Compared to last year, energy prices are down 13.3%. The monthly drop was driven by a 29.5% decline in gasoline prices, which are now down 29.4% on the year. The decline in energy and gasoline prices are each record declines.
By Patrick McGee and edited by Stephen Huebl
©CEP News Ltd. 2008