WASHINGTON (12/18/13)--There was no measurable inflation in November, according to Labor Department data released Tuesday. The department's consumer price index didn't change last month, after falling by 0.1% in October.
Falling fuel costs kept downward pressure on prices. The energy index declined by 1% after a 1.7% decrease in October. Gasoline prices dropped by 1.6% in November. Core CPI, however, which excludes food and fuel, rose by 0.2% last month, after increasing by 0.1% in October and September.
The CPI rose by 1.2% on an annual basis, with core CPI up by 1.7%.
The data were released before Federal Reserve officials met in Washington for a two-day meeting to determine monetary policy and the future of the Fed's quantitative easing program. Fed officials have expressed concerns about deflation, and may refrain from scaling back their $85 billion in monthly asset-purchases, despite a recent string of positive economic news in the U.S. (Economy.com Dec. 17).
St. Louis Fed President James Bullard, who votes on the Federal Open Market Committee, said last week that slight changes in monetary policy could account for labor market gains, but that weak CPI numbers could see quantitative easing sustained in 2014. After the FOMC meeting in September, Fed officials said that inflation below 2% could hinder economic growth (Bloomberg Dec. 17). Watch News Now for results of the FOMC meeting, which ends today.
The median prediction of 83 economists polled by Bloomberg forecast a 0.1% CPI increase, with predictions ranging from a 0.1% decrease to a 0.2% expansion.
Laura Rosner, a U.S economist at BNP Paribas in New York also told Bloomberg that a glut in holiday season inventory could drive prices down further in the coming months.