(Adds details, market reaction, analyst comment)
By Mark Felsenthal
WASHINGTON Dec 14 U.S. consumer prices jumped
a bigger-than-expected 0.8 percent in November, the sharpest
climb in more than two years and driven by surging energy
costs, a government report released on Friday showed.
The Consumer Price Index, the most broadly used gauge of
inflation, rose at the fastest rate since September 2005, as
energy costs jumped 5.7 percent, a Labor Department report
said. Analysts polled by Reuters were expecting a 0.6 percent
rise in the CPI.
Energy accounted for nearly 70 percent of this month's
increase in the CPI, a Labor Department official said.
Even so, core prices, which strip out volatile food and
energy costs, were up 0.3 percent, the biggest jump since the
same increase in January. Analysts were expecting a 0.2 percent
rise in core prices.
Consumer prices were also 4.3 percent higher than a year
ago, the steepest increase since a matching gain in June 2006
and above the 4.1 percent rise forecast by economists.
But stripping out food and energy, prices were up 2.3
percent from November 2006, which was in line with
During November, gasoline prices rose a seasonally adjusted
9.3 percent, the steepest climb in six months. They have risen
37.1 percent over the past 12 months, the biggest one-year rise
in more than two years.
So far this year, energy costs have advanced at a 18.1
percent annual rate, six times faster than the 2.9 percent rise
for all of 2006.
Prices for U.S. government bonds fell as did stock index
futures after the higher-than-expected inflation data, which
suggested mounting price pressures may make it harder for the
Federal Reserve to lower interest rates to help the economy
weather financial turmoil and the housing slump.
"It all shows that prices pressures exist in the United
States," said Marc Chandler, senior currency strategist for
Brown Brothers Harriman in New York.
(Reporting by Mark Felsenthal, editing by Joanne Morrison)