Led by higher gasoline prices, consumer inflation shot up in November by the largest amount in more than two years.
In a troubling juxtaposition, the rise in inflation is coming at a time when economic growth is slowing sharply under the weight of a steep slump in housing and a severe credit crunch.
The Labor Department report Friday showed that its closely watched Consumer Price Index rose by 0.8 percent last month, the biggest increase since September 2005, as energy prices jumped by 5.7 percent, reflecting a huge gain in gasoline. Core inflation, which excludes energy and food, was also up last month, rising by 0.3 percent as the cost of clothing, airline tickets and prescription drugs all took big jumps.
On Friday, light, sweet crude for January delivery fell 98 cents to settle at $91.27 a barrel on the New York Mercantile Exchange. For the week, the contract rose $2.99, or 3.3 percent.
January gasoline futures fell 3.27 cents to settle at $2.3417 a gallon on the Nymex.
In Lawrence, a gallon of regular unleaded gasoline averaged $2.801 on Friday, up 2.1 cents from a day earlier, according to the Oil Price Information Service.