U.S. Consumer Prices Rose 0.4% in November

By Sarah Chaney and Josh MitchellFeaturesDow Jones Newswires

U.S. consumer prices rose in November, propelled by a rise in energy prices, while underlying inflation pressures showed signs of moderation.

The consumer-price index, which measures what Americans pay for everything from breakfast cereal to doctors' visits, increased 0.4% in November from the prior month, the Labor Department said Wednesday. The headline rise was underpinned by a 3.9% increase in the energy index. Excluding the volatile categories of food and energy, so-called core prices rose a more sluggish 0.1%, a slowdown from the previous month's 0.2% increase.

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Economists surveyed by The Wall Street Journal had expected overall prices to rise 0.4% in November and core prices to rise 0.2% on the month.

From a year earlier, consumer prices climbed 2.2% in November. Prices were up 1.7% on the year when excluding food and energy.

Certain categories that had shown weakness earlier in the year, including cell phone services and prescription drugs, increased in November. Still, shelter prices moderated, growing 0.2% from a month earlier, down from a 0.3% rise in the previous two months. Food prices were unchanged in November, and the apparel index fell 1.3% in November, the largest decrease since September 1998.

The report is the Federal Reserve's last peek at a major inflation gauge before the central bank's two-day policy meeting concludes Wednesday afternoon. Central bank officials are likely to look through the uncertain inflation outlook and raise interest rates by a quarter-percentage point, the fifth such increase since the Fed began raising rates from near zero two years ago.

The consumer-price index tends to run a little bit higher than the Fed's preferred measure of inflation, the personal-consumption index, reflecting different methods for calculating inflation. Both gauges have followed the same pattern.

The price index for personal-consumption expenditures rose 1.6% in October from a year earlier, the Commerce Department earlier said. That annual inflation reading has remained below the Fed's 2% target for the best part of 5 ½ years.

Persistently low inflation readings could complicate officials' decisions on how quickly to raise interest rates in 2018 and beyond.

Chicago Fed President Charles Evans said in a speech in London last month that price growth has been too lackluster.

"I'm concerned something more persistent is holding down inflation today. Namely, I feel we are facing below-target inflation expectations," Mr. Evans said.

A separate Labor Department report showed average weekly earnings for private-sector workers, adjusted for inflation, increased 0.1% in November from the prior month.

The Labor Department's latest report on the consumer-price index can be accessed at: https://www.bls.gov/news.release/cpi.nr0.htm

Write to Sarah Chaney at sarah.chaney@wsj.com and Josh Mitchell at joshua.mitchell@wsj.com

(END) Dow Jones Newswires

December 13, 2017 08:45 ET (13:45 GMT)