Consumer prices generally declined during the month of November, giving the purchasing power of U.S. savings accounts a rare boost. This was an encouraging development, but it's not likely to be a long-term solution for getting more value from savings accounts.
Last Friday, the Bureau of Labor Statistics announced that the Consumer Price Index (CPI) declined by 0.3 percent during November. This episode of deflation represents a reversal of a trend from just a few months ago, when inflation seemed to be getting out of hand. However, some additional details from the CPI report suggest that you should not expect falling prices to become the norm.
Getting gasoline prices under control
Gasoline prices have been volatile in recent years, and have tended to lead the way for inflation in general. In this case, the overall decline in prices was largely due to gasoline prices getting back under control after a late summer flare-up.
The CPI is composed of prices on a range of goods and services intended to represent a typical consumer's buying experiences. One of these components is gasoline, and this part of CPI declined by 7.4 percent in November. However, that decline is just the flip-side of the sharp rise in gas prices that pushed inflation up by 0.6 percent a month in August and September.This is fairly typical of the course that inflation tends to chart. Month-to-month figures can be quite erratic, and an unusual increase one month is often cancelled out by a decline a month or two later. For example, over the past 12 months prices have neither soared nor declined, but instead have risen at by a moderate 1.8 percent.