U.S CPI Declined by 0.3% in November – December Report

The Bureau of Labor Statistics published its recent report of the U.S CPI for November 2012. According to the recent report, the consumer price index declined by 0.3% after it had increased by 0.1% in the previous month; in annual terms the US CPI rose by 1.8%. The consumer price index sans food and energy edged up again by 0.1% during November and by 1.9% in the past twelve months.   

The prime reason for fall in the U.S. consumer price index was related to the sharp fall in energy prices: the energy index plunged by 4.1% (M-2-M) during November; the food index, on the other hand, rose by 0.2%; in annual terms the energy index increased by 0.3%; among the energy products, the gasoline led the fall with a 7.4% drop during last month. During the past twelve months, the food index rose by 1.8%.

The core U.S inflation (CPI sans energy and food) edged up again by 0.2% during November and by 1.9% during the past 12 months. These figures coincided with the recent U.S PPI report, in which the core PPI fell by 0.8% during last month.

In the previous monthly report for October 2012 CPI rose by 0.1% and the core CPI also increased by 0.2% (M-2-M).

The chart below shows the percent shifts (M-O-M) of the U.S. CPI during the past couple of years (up to date).

U.S. inflation 2012 Rate (percent) December 2012

Since the core CPI continues to rally, it could mean the U.S economic development is still slowly progressing.  This news doesn’t seem to have much of an effect on the direction of the U.S dollar against other currencies or commodities prices.

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