WASHINGTON – Consumer prices rose faster than expected last month as energy prices surged to record levels, according to a report today from the U.S. Department of Labor’s Bureau of Labor Statistics.
The seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) rose 0.8 percent in November, nearly tripling the previous month’s 0.3-percent gain. Analysts had expected the CPI to rise 0.6 percent from its level the month before, based on the median forecast from a Bloomberg News survey of 80 economists. (All predicted the CPI would rise, with estimates ranging from 0.4 percent to 1.0 percent.)
Food prices rose 0.3 percent in November, the same as the month before. But the energy index surged 5.7 percent, more than tripling October’s 1.4-percent increase, as fuel oil prices rose 11.8 percent and electrical and natural gas service rose 0.7 percent.
The core CPI excluding food and energy prices also exceeded expectations, rising 0.3 percent from its October level rather than the 0.2 percent analysts had anticipated.
The increase was led by transportation costs, which rose 2.9 percent over the month as motor fuel costs surged 9.3 percent; apparel, which rose 0.8 percent; housing and medical care, both of which rose 4 percent; and other goods and services, which rose 0.3 percent, the BLS said. Education and recreation costs rose only 0.1 percent.
“There is no question, inflation is going to remain a concern for policy makers,” David Resler, chief economist at Nomura Securities International Inc. in New York, told Bloomberg News. “This certainly will give some policymakers pause about the advisability and desirability of further rate cuts.”
Compared with the same month of 2006, the CPI rose 4.3 percent last month to 210.177 points (1982 to 1984 = 100) in what Bloomberg called its biggest increase since June 2006. The core index rose 2.3 percent compared with a year ago, accelerating from October’s 2.2-percent year-over-year gain. Food prices rose 4.8 percent over the year, while the energy index rose 22.3 percent.
In the Northeast, the CPI-U rose to 223.356 last month, an increase of 0.6 percent from its level in October and 4.0 percent from November 2006.
Meanwhile, American workers’ real average weekly earnings (adjusted for inflation) fell 0.4 percent from October to November, continuing the previous month’s decline, the BLS said in a separate report today. Real earnings fell a revised 0.3 percent in October – rather than the 0.2 percent of the bureau’s initial report – after rising 0.1 percent in September and 0.5 percent in August.
Average hourly earnings increased last month by 0.5 percent, after rising 0.2 percent in October. But that gain was more than offset by a 0.9-percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the BLS said. Average weekly hours were unchanged for the fourth consecutive month.
Compared with November 2006, real earnings fell 0.8 percent. But before deflation by the CPI-W, average weekly earnings rose 3.8 percent to $595.89, from $574.26 a year earlier.
Additional information, including the 19-page Consumer Price Index report, is available from the U.S. Department of Labor’s Bureau of Labor Statistics at www.bls.gov/cpi; the five-page Real Earnings report can be found at www.bls.gov/ces.
