US inflation measure rose by more than forecast in November

[NEW YORK] A measure of prices paid by US consumers rose in November by more than forecast as costs of transportation services and apparel accelerated, though inflationary pressures elsewhere remained subdued as the pandemic continues to curb activity.

The consumer price index rose 0.2 per cent from the prior month after no change in October, Labor Department data showed Thursday. Compared with a year earlier, the gauge rose 1.2 per cent. The core index, which excludes volatile food and energy costs, also advanced 0.2 per cent from the prior month and increased 1.6 per cent from a year earlier.

The median forecast in a Bloomberg survey of economists called for a 0.1 per cent gain in both the CPI and core measure.

While services costs picked up last month by the most since July, a broadening of inflation will likely take time as the nation awaits the distribution of Covid-19 vaccines. Currently, merchants have limited leeway to charge customers more as unemployment remains elevated and a surge in infections prompts some states and cities to reimpose restrictions on business.

The report showed the cost of transportation services jumped 1.8 per cent, the most in four months. Airfares rose 3.5 per cent after a 6.3 per cent increase a month earlier, and motor vehicle insurance advanced 1.1 per cent in November. Lodging away from home was 3.9 per cent more expensive than in October, the largest gain since 2005.

BLOOMBERG