Washington, DC, December 15, 2005--Consumer prices fell at the fastest rate since 1949 in November, plunging 0.6% as energy prices retreated, according to the Labor Department.
Energy prices fell a record 8% in November, reversing a spectacular 12% gain in September. Still, energy prices are up 18.3% in the past 12 months.
Excluding volatile food and energy prices, the core consumer price index rose 0.2% in November.
The 0.6% drop in the CPI was larger than the 0.4% expected by economists. The 0.2% rise in the core rate was as expected.
The CPI has risen 3.5% in the past year, down from 4.3% in October. Core inflation is up 2.1% in the past year, the same as in October. The CPI and core CPI both rose 0.2% in October.
The CPI indicates a slight acceleration in core prices over the past few months, but no major passthrough from the spike in energy prices. Core prices have risen at a 2.4% annual rate in the past three months.
Gasoline prices fell a record 16% in November, while fuel oil prices dropped 6.1%. But the pain from Katrina is not over. Electricity prices rose a record 3.8%, as utilities passed on the costs of higher fuel, especially natural gas.
Residential natural gas prices fell 0.5% after seasonal adjustments.
Food prices rose 0.3% on a jump in pork and dairy prices.
Housing prices, which represent 42% of the CPI, rose 0.5% as hotel and motel prices rose 1.3%. Owners' equivalent rent and rent of primary residence both increased 0.2%.
Rising hotel and motel prices accounted for more than half of the increase in the core rate.
Medical care prices increased 0.6% in November, the largest increase since February. Hospital services prices increased 1.1%, the most in three years. Drug prices gained 0.7%.
Transportation prices plunged 4.8%, largely because of falling fuel prices. New car prices fell 0.1%. Airfare fell 1.5%.
Apparel prices were up 0.2% after seasonal adjustment.
Education and communication prices rose 0.4%. Recreation prices were flat.
