A slice of the consumer price index that Federal Reserve Chair Jerome Powell flagged recently as potentially “most important” for determining the outlook moderated again in November.
Services prices excluding energy services and rents rose just 0.1% last month, after logging increases of 0.4% in October and 0.8% in September, according to Bloomberg calculations based on data published Tuesday by the Labor Department.
That brought the year-over-year increase to 6.2%, down from a peak of 6.5% in September. The metric is similar to the one Powell described for the personal consumption expenditures price index, which the Commerce Department will publish later in the month.
“This spending category covers a wide range of services from health care and education to haircuts and hospitality. This is the largest of our three categories, constituting more than half of the core PCE index,” Powell said in a Nov. 30 speech at the Brookings Institution in Washington.
“Thus, this may be the most important category for understanding the future evolution of core inflation.”
A broader gauge of inflation — the widely tracked “core” metric that includes goods, services and housing but excludes food and energy items — advanced 0.2%, less than the median forecast in a Bloomberg survey.
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