Consumer inflation unchanged in November

By Reuters

U.S. consumer prices were flat in November as Americans paid less for cars and gasoline, while the 12-month inflation reading fell for the second straight month, which could give the Federal Reserve more room to help a still-weak economy.

The Labor Department said on Friday the Consumer Price Index was unchanged last month. Economists had expected an increase of 0.1 percent after a drop of 0.1 percent in October.

Prices rose 3.4 percent in the 12 months through November.

That is off from the 3-year high of 3.9 percent clocked in September, and Friday's report backs the view that the spike in inflation is subsiding.

Economists and investors see inflation cooling over the coming months, which could help convince the Federal Reserve to do more to bring down the country's 8.6 percent unemployment rate.

Earlier in the week, the Fed warned that turmoil in Europe presents a big risk to the U.S. economy, and policymakers left the door open to possible further steps to boost growth.

Fed officials are divided among those who think high unemployment and sluggish growth require more action and those who view the central bank's already-aggressive efforts as bordering dangerously on an invitation to inflation.

Most economists have said the Fed's next meeting on Jan. 24-25 would be the more likely occasion for any new moves to add to the U.S. central bank's already extraordinary push to bring down borrowing costs and help growth.

Food prices rose 0.1 percent, while gasoline fell 2.4 percent.

Outside food and energy, prices climbed 0.2 percent in November.

In a sign that could give pause to policymakers still concerned about inflation, core prices rose 2.2 percent in the 12 months through November, up from 2.1 percent in October.

The U.S. central bank has held overnight interest rates near zero since December 2008 and has bought $2.3 trillion in government and mortgage-related bonds in a further attempt to stimulate a robust recovery.??

Source: http://bottomline.msnbc.msn.com/_news/2011/12/16/9492693-consumer-inflation-unchanged-in-november

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