Many of us had been too consumed in the holidays and all of the geopolitical events of the year to notice that monetary inflation in the U.S. is so out of whack that it is currently at a 2-year high as 2016 rounds out. While it's small enough that it isn't getting many people talking, it is very important to know about the current state of inflation and how it will impact your spending power in the near future.
Consumer prices, or the Consumer Price Index (CPI), increased by 1.7% year-on-year in November 2016, after a 1.6% rise in October and in line with market expectations. It should be noted that this was the highest inflation rate since October 2014, mainly boosted by higher energy costs while food prices continued to drop.
Compared to last year, energy costs increased 1.1%, following a 0.1% gain in October. Additional upward pressure came from: shelter (+3.6% from +3.5% in October); transportation services (+2.5% from +2.6%) and medical care (+3.9% from +4.1%).
In the meantime, food prices fell by 0.4%, the same as in October and the third straight month of decline.
Annual core inflation, which excludes food and energy, was recorded at 2.1%, the same as in October and missed the overall consensus of 2.2%.
On a monthly basis, consumer prices increased by 0.2% in November, which eased up from a 0.4% gain in October. The shelter index advanced 0.3% in November, while the gasoline index increased 2.7%. The food index was unchanged in November, as the index for food at home fell 0.1%, its seventh consecutive decline. The energy index increased 1.2%, although gasoline was the only major energy component index to increase over the month. The index for all items less food and energy rose 0.2% in November after rising 0.1% in October.
Keep vigilante and be aware of what inflation is costing you now and potentially in the future.
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