U.S. inflation likely cooled again in November as Fed prepares to assess interest rates
The Hindu
But a closely watched category called “core prices,” which excludes volatile food and energy costs, is predicted to rise 0.3% from October to November — a monthly pace that far outpaces the Federal Reserve’s 2% annual inflation target.
This year's steady slowdown in U.S. inflation likely continued in November, though the latest data may also point to steadily higher prices in some areas of the economy.
Tuesday's inflation report from the Labor Department is expected to show that businesses kept overall prices unchanged for a second straight month.
Falling gas prices, in particular, are thought to have offset a rise in food costs from October to November. And compared with a year earlier, inflation is expected to ease to 3.1% from 3.2% in October, according to a survey of economists by FactSet.
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But a closely watched category called “core prices,” which excludes volatile food and energy costs, is predicted to rise 0.3% from October to November — a monthly pace that far outpaces the Federal Reserve's 2% annual inflation target. On a year-over-year basis, core prices are expected to increase 4%, the same as in October.
The Fed considers core prices to be a better guide to the likely path of inflation. Analysts say that increases in the costs of hotel rooms, airfares and possibly used cars might have accelerated core prices in November.
Gas prices, by contrast, have tumbled since September, having reached a national average of about $3.35 a gallon in mid-November, from a peak of $5 about a year and a half ago, according to AAA. The national average has since fallen further and hit $3.15 a gallon Monday.
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