NEW YORK (CNNMoney.com) -- Consumer prices continued to rise in November, but the pace remains sluggish, the government reported Wednesday.
The Consumer Price Index, a key measure of inflation, increased 1.1% over the past 12 months ending in November, the Bureau of Labor Statistics said. And the more closely watched core CPI, which strips out volatile food and energy prices, rose just 0.8% over the year.
Tepid rises in food and energy costs kept the rise in the overall index muted. Food prices rose a modest 1.5% for the year, while gasoline prices climbed 7.3% for the year. Though gasoline prices have been rising for several months, momentum is starting to wane -- the 0.7% monthly increase in gas prices was the slowest of the last five months.
While food and energy prices may soon hit consumer's wallets given the recent surge in energy and agriculture commodities, "deflation is still a greater threat than inflation," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, adding that "there is far too much slack in the economy" for for inflation to kick in.
At around 1%, inflation is still considered too low, and can raise some concerns of deflation -- or falling prices. That's why the Federal Reserve is trying to raise inflation slowly, to reach its target of about 2% per year.
Following its final meeting of the year Tuesday, the central bank reiterated its controversial plan to stimulate the economy by buying up long-term Treasuries in order to bring down interest rates.
But critics of that policy fear that it could push up asset prices and lead to higher inflation down the road.
So far those fears have not come true. In October, core CPI rose a measly 0.6%-- the smallest increase on record. And Wednesday's numbers are unlikely to lend more support to the opposition.
On a monthly basis, CPI rose 0.1% in November, marking a slowdown from the previous month. Economists surveyed by Briefing.com expected a 0.2% rise. Core CPI also rose 0.1% during the month, in line with economist forecasts.
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