BCREA ECONOMICS NOW - US CPI Inflation - December 16, 2011
US CPI Inflation
US consumer inflation was little changed in November, registering an annual rate of 3.4 per cent, a 0.1 point drop from October. Core inflation, which excludes energy and food prices, rose 2.2 per cent in November. A slowing global economy and a rising US dollar should constrain future increases in key commodity prices, leading to a slower pace of consumer price inflation. Moreover, persistent slack in the US labour market will translate to weakness in wage growth which will in turn keep core inflation muted.
Of course, inflation is far from the US Federal Reserve's most pressing concerns given 8.6 per cent unemployment and financial risk emanating from Europe. Therefore, short-term fluctuations in inflation are unlikely to move the Fed off of its conditional commitment of low interest rates until mid-2013.
For more information, please contact:
Cameron Muir | Brendon Ogmundson |
Chief Economist | Economist |
Direct: 604.742.2780 | Direct: 604.742.2796 |
Mobile: 778.229.1884 | Mobile: 604.505.6793 |
Email: cmuir@bcrea.bc.ca | Email: bogmundson@bcrea.bc.ca |
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