U.S. consumer prices rose as expected in November on higher energy costs, but after excluding volatile energy and food prices, inflation disappeared, the Labor Department reported Wednesday. The Consumer Price Index (CPI), the government's most closely watched inflation gauge, rose 0.4 percent in November, up from a 0.3 percent gain in October. But “core” inflation, which excludes energy and food, was flat, signaling that inflation is not rising through the economy. It was the first time core inflation was unchanged after 10 consecutive monthly increases. The absence of “core” inflation gives the Federal Reserve (Fed), ending a two-day policy meeting Wednesday, room to hold its key interest rate at a historic low to assist the economic recovery. Energy prices rose 4.1 percent last month, reflecting more expensive fuel oil and gasoline. However, energy prices currently are retreating, with oil prices down about 10 percent this month. Food prices rose 0.1 percent for the second consecutive quarter, and clothing prices fell as retailers struggled to attract shoppers. Prices for airline fares, new cars, and medical care rose. Over the past 12 months, consumer prices rose 1.8 percent, as expected, the first 12-month gain since February. Core prices rose 1.7 percent of the 12-month period. --SPA
