Consumer prices were up +0.3% in November, and up +2.1% on a yearly basis to the highest yearly increase since November 2018. Before seasonal adjustments gasoline prices were down less than usual for November at -1.1% for the month, however, seasonal adjustments brought gasoline prices to a +1.1% gain, which in turn helped boost overall energy costs up +0.8% for the month. Core consumer inflation, which removes the effects of energy prices and a +0.1% gain for food, was up +0.2% for the month and +2.3% for the year. Yearly core inflation price increases were the highest for medical care services (+5.1%), shelter (+3.3%), and transportation services (+0.8%), and fell the most for apparel (-1.6%), used cars (-0.4%), and new cars (-0.1%).

The Federal Reserve voted unanimously to leave the federal funds rate at a 1-1/2 to 1-3/4 percent range, noting that it would assess “a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments” in setting future rate adjustments. The meeting also issued updated economic projections which indicated no expected changes to the federal funds rate in 2020 and a drop in the unemployment rate to compared to their September projections. Median GDP forecasts were unchanged at 2.2% for 2019, 2.0% for 2020 and a longer run rate of 1.9%, as were PCE inflation rate predictions of 1.5% for 2019, 1.9% for 2020 and a longer run rate of 2.0%.

Retail sales were up +0.2% in November to $528 billion, gaining +3.3% from November 2018. Nonstore (e.g. online) retailers showed the highest yearly gains at +11.5%, followed by food services (+5.1%), and automobile dealers (+4.9%). Yearly sales fell -7.2% at department stores, which dragged down overall sales at general merchandise stores by -0.1%. The retail sales numbers do not adjust for inflation, and the drop in price for apparel noted in the consumer price report contributed to a -3.3% Y/Y drop in clothing sales. Electronics and appliance store sales were up +0.7% for the month, but down -1.5% Y/Y.