United States: Consumer prices fall more than expected
December 14, 2012
In November, consumer prices fell 0.3% over the previous month in seasonally adjusted terms. The decline contrasted the 0.1% increase recorded in October and exceeded market expectations, which had anticipated prices would drop only 0.2%. The monthly fall reflected a sharp decline in energy prices, which plunged 4.1% over the previous month.
As a result of the monthly price drop, annual headline inflation declined from 2.2% in October to 1.8% in November. Meanwhile, the closely monitored core inflation index, which excludes food and energy, added 0.1% over the previous month (October: +0.2% month-on-month), undershooting market expectations of a 0.2% rise. As a result, annual core inflation inched down from 2.0% in October to 1.9%.
Annual average inflation over the previous 12 months inched down to 2.2% from 2.3% in October. The Federal Reserve expects PCE inflation (based on the price index for personal consumption expenditures) to average between 1.3% and 2.0% in 2013. For 2014, the Fed anticipates PCE inflation to range between 1.5% and 2.0%.