US CPI hits 4.1 percent as Brent crude falls below 80 dollars per barrel
US inflation data coincided with a sharp oil price drop that will transmit directly to household energy costs. Primary production and consumption records indicate the relief is supply- and demand-driven rather than policy-induced. The shift alters the near-term inflation path without changing underlying monetary conditions.
Bureau of Labor Statistics data released November 2023 showed headline inflation at 4.1 percent, driven by shelter and food components that offset energy declines. West Texas Intermediate crude traded near 78 dollars, down from 95 dollars in September, reflecting higher US shale output and weaker Chinese industrial demand. Primary records from the Energy Information Administration confirm weekly US crude production above 13.2 million barrels, the highest since 2020.
OPEC+ output restraint has not offset the combined effect of non-OPEC supply growth and soft global demand. US household energy expenditures, tracked in BEA personal consumption data, are positioned to fall in the first quarter of 2024 if current futures curves hold. This reduces measured inflation without requiring further monetary tightening.
The Federal Reserve's dual mandate calculus now incorporates lower energy pass-through into core services prices. Treasury and EIA weekly reports show no immediate supply disruption from sanctions enforcement on Russian crude. Lower gasoline prices at the pump will register in CPI within eight to ten weeks.
Forward curves priced in ICE and NYMEX data indicate sustained sub-80 dollar Brent through March 2024 absent a major OPEC+ cut or Middle East supply shock. This trajectory lowers the probability of additional rate hikes while core services inflation remains above target.
EIA: National average regular gasoline price falls below 3.20 dollars per gallon by February 2024
Sources (2)
- [1]Primary Source(https://www.bls.gov/news.release/cpi.nr0.htm)
- [2]Supporting Source(https://www.eia.gov/petroleum/weekly/)