United States Inflation November 2018

United States

United States: Inflation softens in November on falling energy prices

November 12, 2018

Consumer prices were flat from the previous month in November, down from October’s 0.3% monthly increase and matching analysts’ expectations. The result was driven largely by a tumble in energy prices in the month—mainly due to declining prices for the commodities gasoline and fuel oil deriving from the sharp correction that has affected crude oil markets since October. The decline offset price increases for shelter, medical services, and a sharp uptick in the prices of used cars and trucks. Core consumer prices—which exclude volatile items such as food and energy prices—rose 0.2% month-on-month in November, matching both the October print and market expectations. Meanwhile, inflation decreased from 2.5% in October to 2.2% in November, which was also in line with expectations.

Core inflation—one of the most closely watched indicators of the CPI report for evaluating possible changes in monetary policy decisions from the Fed—ticked up slightly from October’s 2.1% to 2.2% in November. The data remains consistent with a likely rate hike at the Fed’s next monetary policy meeting, on 18-19 December, which is still the most widely held view among FocusEconomics Consensus Forecast panelists. However, recent comments from FOMC members—and particularly from Fed Chairman Jerome Powell—suggest the Fed may take a more cautious and gradual approach to rate hikes starting in 2019 than the current pattern of steady increases.

Looking ahead, the recent fall in crude oil prices should moderate price pressures in coming months, but core inflation is likely to remain tilted to the upside. The effects from tariffs on Chinese imports could support upward price movements, though preliminary evidence suggests these effects might have already passed through to prices. According to Nomura analysts:

“The prices of some goods subject to the most recent tranche of US tariffs imposed on Chinese imports rose strongly in October. Among these items, prices for clocks, lamps and decorator items continued to rise in November, but the prices of many other goods such as other home appliances, furniture, cookware, tableware and watches reversed some of the previous increases, indicating that tariffs on imported Chinese consumer goods might not have a large impact on core CPI inflation”.

FocusEconomics Consensus Forecast participants expect inflation to average 2.3% in 2019, unchanged from last month’s forecast. For 2020, the panel expects inflation to average 2.1%.


Author:, Economist

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USA Inflation November 2018 0

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Bureau of Labor Statistics.


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