The U.S. inflation rate slowed in November, with prices rising just 0.1%.
The Bureau of Economic Analysis (BEA) also reported Friday (Dec. 23) that the personal consumption expenditures (PCE) price index for November increased by 0.1%.
Prices for services increased 0.4% and those for food rose 0.3%. These rises were partially offset by a 0.4% decrease in prices for goods and a 1.5% drop in energy prices, according to the report.
Excluding food and energy, the PCE price index increased 4.7% from a year earlier.
November’s increase in the PCE price index was the lowest recorded since July, when prices dropped 0.1%.
In a Friday statement posted by the White House, President Joe Biden said that the data shows signs of resilience and a recovery in the economy.
“Today’s report shows that incomes are up and inflation is coming down — while our job market remains strong,” Biden said. “Christmas arrives with gas prices down and grocery store prices showing the lowest increase in a year.”
In a Friday report by Reuters, Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina, said, “Inflation continues to slow down, which is good news for the Fed’s most important objective, but unfortunately for the market, it is happening at the same time as consumers are reducing their spending.”
In other news from the BEA report, consumers’ incomes grew faster than their expenditures in November.
BEA said that personal income increased by 0.4%, disposable personal income (DPI) grew 0.4% and personal consumption expenditures (PCE) were up 0.1% during the month.
The growth rates for both personal income and disposable personal income were lower than October’s 0.7% but equal to the 0.4% seen in the three months before that. Personal consumption expenditures slowed considerably from October’s 0.9% growth rate and increased at the slowest pace since July, which saw a decrease of 0.1%.
The increase in personal income was driven by increases in compensation — with private wages and salaries rising in both services-producing industries and goods-producing industries — and personal income receipts on assets.
Spending on services increased in November, but this was partially offset by a decrease in spending on goods. Consumers spent more on housing during the month, driving the growth in spending on services, but spent less on new motor vehicles, especially light trucks, which was the category that led to the drop in spending on goods.
