Auto insurance up 5.5% in November consumer price index

Falling gasoline prices left inflation unchanged in November but core prices edged higher, the government said Tuesday in a report that the Federal Reserve will review closely as it weighs a likely hike in interest rates this week.

Over the year, overall prices rose 0.5%, the largest 12-month increase since December 2014.

In November, energy prices fell 1.3 percent, with gasoline prices dropping 2.4 percent after rising 0.4 percent in October.

The Fed’s preferred inflation gauge, the index of personal consumption expenditures, hasn’t hit the central bank’s 2% target in 3½ years.

Annual inflation on the old all-items retail prices index measure rose from 0.7 per cent in October to 1.1 per cent in November.

The Federal Open Market Committee, or FOMC, which sets USA monetary policy, began its last meeting of the year on Tuesday.

Retail prices were up 5 per cent year on year in October. Overall prices are being held back by a sharp fall in energy costs and a stronger dollar, which makes imports cheaper.

And Danske Bank’s Belfast-based economist Angela McGowan is predicting that that UK’s interest rate may rise from its historic 0.5 per cent low as soon as next May.

It means a typical basket of bills, services and goods that cost £100 a year ago would today cost £100.10 today.

Food prices declined 0.1 percent last month, the first decrease since March.

And she said that even though inflation is still expected to be low spring, the underlying pressure on the Bank of England will be to adjust interest rates. Food prices dipped 0.1%, reversing the prior month’s gain.

On the other hand, the Labor Department said prices for recreation, apparel, household furnishings and operations, and used cars and trucks all declined. The cost of doctor visits increased 1.1%, while prescription drug prices advanced 0.4%.

He added that there were signs that wage growth was flattening out with figures due out tomorrow expected to show pay growth had slowed from 3.0% to 2.5%.

Airline fares increased 1.2%, after rising 1.5% in November. The cost of electricity, however, increased 0.3 percent.