Inflation Remains Within Targets in November

Companies and Brands

Published: December 14, 2012 8:46 am

Last Updated: December 14, 2012 8:51 am

The Bureau of Labor Statistics is out with its reading on inflation. In November, the Consumer Price Index was -0.3% on the headline, and the core rate, excluding food and energy, rose by 0.1%. Bloomberg and Dow Jones both had a consensus estimate of -0.2% on the headline and 0.2% for the core rate.

In November, energy prices were down by 4.1%, as gasoline prices were down by 7.4%. Food costs were up by 0.2%.

Here is what investors need to watch closely due to that 2.0% inflation mandate from the Federal Open Market Committee (FOMC): on a year-over-year basis, the nominal CPI was up by 1.8% and the annualized core CPI reading was 1.9% higher. The FOMC did leave a little wiggle room in the CPI reading, up to a sustained expectation of more than 0.5% higher than that 2.0% threshold.

Today’s inflationary data is not likely to be an serious market impact-generation tool, based on how close the numbers are to the consensus estimates.

JON C. OGG

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