Consumer Prices Decline for November

The U.S. Department of Labor reported today that consumer prices declined by 1.7% in November, after a 1% decrease in October. Price declines like this may seem very small to the consumer - a 2% discount is hardly anything to get excited about - but the U.S. hasn't seen a price decline this severe in the entire time the Department of Labor has been keeping track of consumer prices starting in 1947.

Price Changes by Category
Though the prices of most goods and services remained virtually unchanged, the overall price decline was mostly caused by a dramatic drop in the price of fuel - the energy index declined by 17% in November. This is about twice the October decline, and energy prices are now 47% below their July peak when the price of gas topped $4 a gallon in most areas of the country. The index for natural gas also decreased in November, down 21.7% from its highs in July.

Food prices increased slightly by .2% in November and .3% in October. The food at home index remains unchanged for November, but is up 7% when compared to November 2007. Meat, poultry, fish, and eggs are down for the first time since February, falling .7%, and the fresh fruits and vegetables index also declined for the third month in a row. The declines in meats and produce were offset by higher prices in dairy and other types of foods at home. The index for food away from home rose by .3% in November, and the index for alcoholic beverages rose .5%.

The housing index was .1% lower in November after being virtually unchanged in October. The indexes for rent and owner's equivalent rent both rose .3%. The index for lodging away from home fell by 1.1%, its second straight significant decline. The household energy index is down 2% in November after falling .9% in October. Both the fuel oil and natural gas indexes have declined substantially for four consecutive months - fuel oil is down 14.6% and natural gas is down 5.2% for November. Electricity rose for two months in a row, increasing .6% for November.

Transportation prices declined 9.8% in November after dropping 5.4% in October. The motor fuel index fell 29% in November after decreasing 13.9% in October, and is now 28.6% lower than November 2007. The price of new and used motor vehicles declined .9% in November after a .7% decline in October. The used car and truck index declined 2.2% in November. New vehicle prices are .6% lower for November, and have fallen 2.9% since November 2007. Public transportation is down 2.7% for November after a decrease of 3.3% in October. Airline fares are down 4% for November, the third consecutive decline but still 4% higher than November 2007.

Medical care costs rose .2% in November and are 2.7% higher than in November 2007. Recreation prices were virtually unchanged in November after a .1% increase in October. Education and communication prices rose .2% for November, the same increase as October.



Source:
U.S. Department of Labor - Bureau of Labor Statistics