Inflation fell sharply in November as the price of gas fell the most it has since late 2008.
The Bureau of Labor Statistics reported Wednesday that consumer prices fell by 0.3 percent in November, at the outer range of the drop expected by economists.
For the year, inflation fell to 1.3 percent, the lowest mark since February. Inflation, as gauged by the Consumer Price Index, had risen to as high as 2.1 percent in June, but fell back to 1.7 percent in October before the most recent energy-influenced plunge.
The price of gasoline fell by 6.6 percent in November alone, adjusted for seasonal variation, and was down 10 percent on the year. Overall energy costs were down nearly 5 percent annually.
Drivers have seen prices at the pump fall even faster in recent weeks. The average price of a gallon gas in the U.S. fell by nearly a third since June to $2.50 this week, according to GasBuddy.com.
Apart from energy, however, prices have seen broad-based, if moderate, increases.
Stripping out energy and food, prices were up 0.1 percent in November. Core inflation is up 1.7 percent annually, just slightly down from 1.8 percent in October.
Despite the fact that headline inflation dropped the fastest it has in six years, government officials and economists are likely to view the decline as only temporary, and expect inflation to continue rising again when oil prices stabilize.
Federal Reserve officials, set to conclude a two-day monetary policy meeting in Washington Wednesday, will release new projections for inflation. They’re expected to say that it will continue rising slowly toward their 2 percent goal, despite the short-term effects of falling oil prices.
The price of a barrel of oil has fallen by roughly half since the summer.
Members of the Fed have said in recent weeks that falling energy costs are beneficial for the economy, putting more money in consumers’ pockets. Over the medium term, chairwoman Janet Yellen and other officials expect that the falling unemployment rate will put upward pressure on wages and inflation.
