In November, United States consumer prices fell for the first time in six months.
As previously reported by Fox Business, the drop in consumer prices has pointed to muted inflation pressures that should allow the Federal Reserve to stay on its ultra-easy monetary policy path as it attempts to nurse the economy back to health.
On Friday, the Labor Department said that it’s Consumer Price Index fell 0.3 percent last month as gasoline prices fell 7.4 percent. That decrease in gas prices offset a 0.2 percent gain in food prices.
The price of gasoline at the pump fell 29 cents in November.
The Labor Department also said that this was the largest drop in the Consumer Price index since May, following a 0.1 percent gain in October.
The core Consumer Price Index, which excludes food and energy prices, increased 0.1 percent after rising 0.2 percent in October. Even though the summer drought caused food prices to rise 0.2 percent in a lagged response, price pressures remain benign.
On Wednesday, the Fed said that it expected to hold interest rates as close to zero as possible until unemployment falls to at least 6.5 percent and as long as inflation does not threaten to break above 2.5 percent.
The U.S. central bank replaced an expiring stimulus program with a fresh round of Treasury debt purchases. They did this to help speed up economic growth in the near-term.
In the 12 months to November overall consumer prices increased 1.8 percent, the smallest increase since August. That compared to October’s 2.2 percent rise.
The cost of clothing and other apparel fell 0.6 percent after increasing 0.7 percent in October.
New motor vehicle prices rose 0.2 percent after slipping 0.1 percent the prior month.
The prices for used cars and trucks decreased 0.5 percent, declining for a fifth straight month. Housing costs edged up, with the owners’ equivalent rent rising 0.2 percent after climbing by a similar margin in October.
In the 12 months to November, core CPI increased 1.9 percent after rising 2.0 percent in October.