In November, overall consumer prices fell due to the price at the gas pump dropping. The nation’s key inflation measure, the Consumer Price Index dropped in November by 0.3% thanks mainly to a drop in the price of gasoline of 7.4% in just November, said the Department of Labor on Friday.
Overall prices increased 1.8% compared to last year in November, but were off the 2.2% rate of inflation that was recorded for October.
Falling prices benefited the consumer at gas pumps, which was a timely development to support spending heading towards the all critical shopping season during the holidays, said a financial advisor from Plante Moran. Even though prices in gasoline dropped during November, the price is still nearly 2% higher than it was a year ago.
During the month, the price for a gallon of regular gas dropped by an average of 12 cents to reach $3.40. Some increases to the price of gasoline took place in New Jersey and New York during the early part of November due to shortages of gas from Superstorm Sandy, which caused some price gouging. However, the price on average across the nation dropped steadily during the month.
Another important component of the consumer price index is food prices, which moved up slightly during November and were 1.8% higher this year than last November.
The core-CPI, which takes out volatile energy and food prices, also was up higher during the month and was nearly 2% higher this November compared to last November. Core prices are monitored much closer by economists to see the underlying pressure made by inflation.