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