Washingon, DC, December 15, 2006--Consumer prices were unchanged in November, as lower energy and car prices offset increases in costs for homeownership and medical care, the Labor Department reported Friday.
Core prices--which exclude volatile food and energy prices--were also unchanged in November, the lowest core inflation since June 2005.
Economists expected 0.2% gains for both headline and core inflation.
The CPI is up just 2% in the past year, following 0.5% declines September and October and November's flat reading.
The core CPI is up 2.6% in the past year, still above the FOMC's comfort zone but moving in the right direction. Core inflation has risen at a 1.6% annual rate in the past three months.
The core CPI peaked at 2.9% year-over-year in September.
With the CPI flat and hourly wages up 0.2%, real (that is, inflation-adjusted) weekly earnings rose 0.2% in November and are up 2.6% in the past year. Inflation fell or rose at a slower rate for most categories of goods and services.
Housing was the exception, with prices up 0.4% on hefty gains in hotel fares and owners' equivalent rent. The CPI excluding shelter fell 0.2%.
Energy prices fell 0.2% in November, the third decline in a row. However, gasoline prices have ticked higher since the November survey. Energy prices are down 3.8% in the past year.
Food prices fell 0.1%, as fruit and vegetable prices tumbled. Medical care prices rose 0.2%, the smallest gain since July. Apparel costs fell 0.3%, the second decline in a row.
Shelter costs rose 0.4%, including a 0.4% rise in rents and a 0.3% gain in owners equivalent rent. Transportation prices fell 0.9%. New car prices dropped 0.7%. Airfares fell 4.8%, the biggest drop in seven years.
