US consumer prices inched up as expected in November as falling costs for energy and clothing helped offset increases for medical care and food, the government said today.
The Consumer Price Index, the main US inflation gauge, rose by 0.1 per cent in November after advancing 0.3 per cent in October. The core CPI, which excludes volatile food and energy prices, rose 0.2 per cent, the same as in October.
The rise in both the overall and core indices matched the expectations of economists on Wall Street.
Energy prices, which had risen for four straight months, declined 0.2 per cent last month, pulled lower by a 0.4 per cent drop in the cost of petrol. Food prices rose 0.2 per cent.
Low inflation has given the Federal Reserve leeway to act aggressively to try to spur the economy with rate cuts. Fed officials cut short-term interest rates an aggressive half-percentage point in early November as a form of insurance to make certain prices do not begin to drop, according to minutes of that policymaking session released last week.
Although most economists discount the risk of deflation - a potentially debilitating decline in broad measures of consumer prices - a persistent drop in goods prices has raised concern.
The CPI report showed so-called core goods prices, which exclude energy and food commodities, fell 0.3 per cent in November to push its 12-month decline to 1.6 per cent from the percent registered in October.
Still, the surprisingly steep drop has been more than offset by the rising cost of services. Service prices rose 0.3 per cent last month for a 12-month gain of 3.5 per cent.