Consumer prices unchanged in November

Martin Crutsinger
The Associated Press

WASHINGTON — U.S. consumer prices were unchanged in November, as declines in energy and food costs offset increases in airline fares and medical care.

In this July 16, 2015, photo, a customer refuels her car at a Costco in Pittsburgh.  U.S. consumer prices rose modestly in October 2015 as low gasoline costs and a strong dollar have suppressed inflation. The Labor Department says the consumer price index rose 0.2 percent last month after falling in September and August. Gas costs increased 0.4 percent in October but have plunged 27.8 percent over the past 12 months. (AP Photo/Gene J. Puskar)

The flat reading for consumer prices last month followed a modest 0.2 percent increase in October and outright declines in August and September, the Labor Department reported Tuesday. Core inflation, which excludes energy and food, was up 0.2 percent in November.

Over the past year, overall inflation has risen 0.5 percent while core inflation is up 2 percent.

Those 12-month gains, while modest, are the fastest in more than a year. That could be used by theFederal Reserve as justification for the first interest rate hike in nearly a decade.

Overall energy costs fell 1.3 percent in November, led by a 2.4 percent drop in gasoline pump prices, the third decline in gasoline costs in the past four months.

Nationwide gas prices now stand at $2.01 per gallon, according to AAA's Daily Fuel Gauge. That is down from $2.56 a year ago. In some parts of the country, gas is already below $2 per gallon.

Food costs retreated 0.1 percent in November, the first monthly decline since March. The price of meats, poultry, fish and eggs dropped for the third month in a row.

Meanwhile, prices rose in some categories. Medical care climbed 0.4 percent, and airline fares grew 1.2 percent.

The Federal Reserve will wrap up two days of discussions on Wednesday. It is widely expected to boost a key interest rate by a quarter-point, the first increase in nearly a decade.

The Fed will likely make a move even though inflation is muted. Chair Janet Yellen and other Fed officials have said they believe inflation will begin to move up in 2016 as the temporary impacts of falling global energy prices and a rising dollar begin to fade.