U.S.: Inflation pressures pick up slightly in November, but remain fairly benign - TD Bank Financial Group

According to ActionForex, analysts at TD Bank Financial Group note that the U.S. consumer prices rose 0.2% month/month in November, one tick above expectations, and total CPI was up 1.2% year-on-year in November, unchanged from October. Meanwhile, core inflation was also up 0.2% in November, after remaining unchanged in October. As a result, core inflation was up 1.6% on a year/year basis, unchanged from the prior month.

"Within core inflation, the shelter index rose a modest 0.1% month/month for the fourth month in a row. However, that gain was driven entirely by a rebound in prices for lodging away from home, which rose 3.9% m/m in November after falling 3.2% in October. Other price rebounds were seen in household furnishing and operations (+0.7%), apparel (+0.9% m/m) and motor vehicle insurance (+1.1% m/m). Another notable price increase was a 1.8% m/m gain for transportation services, boosted by a 3.5% increase in airline fares in November. However, airline fares remained 17% below their year-ago levels."

"Zooming out from all those monthly moves, price pressures for core goods and services continued to trend in opposite directions. Core services prices rose 0.2% m/m in November, a pick-up from October. However, on a year/year basis, core services inflation was only 1.7%, the softest pace since 2011. On the other side of the coin, core goods inflation was up 0.1%, and is now +1.4% year/year in October, the fastest pace since early 2012."

"Energy prices picked up a bit, rising 0.4% on the month in November, and are still down 9.4% versus a year ago. Food prices fell 0.1% m/m in November, but still remain 3.7% higher than a year ago."

"While there are still a lot of sizeable month-to-month price swings given the pandemic, overall inflation pressures remained reasonably benign in November. It’s true that core inflation did move up a tick, but remained subdued overall."