US 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. Core prices, which strip out volatile food and energy costs, were up 0.3 percent, the biggest jump since the same increase in January.
KEY POINTS: Analysts and economists in a Reuters survey had a median expectation for a gain of 0.2 percent on core CPI and 0.6 percent on the headline number. 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. * Stripping out food and energy, prices were up 2.3 percent from November 2006, in line with expectations.
"All of these dovish, weak-money individuals, out there screaming for rate cuts, really need a bucket of cold water in the face because if the Fed goes down that path we may have a bubble in the CPI." "These calls to take the fund rate down to like 2.5 - 2 percent are just simply nuts. I think some of this inflation data is essentially confirming that."
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