Gasoline lifts U.S. consumer inflation
WASHINGTON — Surging gasoline prices pulled U.S. consumer inflation up 0.4 percent in November.
The Labor Department said Wednesday that prices at the pump increased a sharp 7.3 percent after falling in October. Excluding volatile food and energy prices, so-called core consumer inflation rose a modest 0.1 percent in November.
Over the past year, overall consumer inflation is up 2.2 percent and core inflation is up 1.7 percent.
Inflation pressures have remained subdued even though the U.S. economy is gathering momentum. Economic growth has clocked in at an annual pace of 3 percent or better in each of the last two quarters for the first time since 2014. The unemployment rate is at a 17-year low 4.1 percent.
But the tight job market has yet to generate significant wage growth, which would push inflation higher. Many businesses still fear losing customers if they raise prices.
Even though hiring has risen steadily, wage gains have been modest.
Food prices were flat in November. Housing prices rose 0.2 percent. Air fares fell 2.4 percent. Apparel prices fell 1.3 percent, biggest drop since September 1998.
On Wall Street, the major U.S. stock indexes finished mixed, with small companies notching big gains as lawmakers in the House and Senate reached a deal on a sweeping tax reform package. Smaller companies stand to benefit most from a reduction in corporate tax rates because they tend to pay higher taxes than bigger corporations.
The markets had little reaction to the Federal Reserve raising its benchmark rate for the third time this year.
“Widely expected. No big surprises. No big changes,” said Tim Dreiling, regional investment director at U.S. Bank Wealth Management. “It’s encouraging that they continue to see economic growth continuing into 2018, which aligns with our thinking.”