PREVIEW-US core CPI seen +0.1 pct, CPI +0.2 pct in Nov

WHAT: U.S. consumer price report for November

WHEN: Wednesday, Dec. 15 at 8:30 a.m. EST (1330 GMT)

REUTERS FORECASTS

CPI m/m y/y Core CPI m/m y/y

Median +0.2 pct +1.1 pct +0.1 pct +0.6 pct

Minimum +0.1 pct +0.9 pct 0.0 +0.5 pct

Maximum +0.5 pct +1.5 pct +0.2 pct +0.8 pct

Prior +0.2 pct +1.2 pct 0.0 +0.6 pct

FACTORS TO WATCH

U.S. consumer prices probably edged up in November making
it likely the Federal Reserve will complete its $600 billion
government bond purchasing program, despite last week’s tax
deal struck between the Obama administration and the Republican
lawmakers. Many economists viewed the plan as lessening the
need for the Fed to fully implement its program, which is aimed
at stimulating demand and preventing prices from spiraling
down.

Food price probably rose for a fourth straight month, with
another gain in gasoline costs anticipated, bumping up headline
CPI by 0.2 percent for a second straight month.

The closely watched core CPI rate, which strips out
volatile food and energy prices, probably ticked up 0.1 percent
in November after being flat for three consecutive months. The
anticipated gain is mostly due to rounding effects.

Economists predict new vehicle prices fell again in
November, with used cars and trucks declining for a third
straight month. Shelter costs are believed to have bottomed,
with another modest increase expected in November.

Apparel prices likely rebounded somewhat last month after
falling for three straight months. Economists, however, expect
any increase to be very marginal and see the risk of another
monthly decline given heavy discounting by retailers keen to
attract holiday shoppers.

Year-on-year core CPI is expected to have remained at up
0.6 percent in November, matching October’s gain, which was the
smallest increase on records going back to 1957.

MARKET IMPACT

The inflation data will probably not provoke much interest
in financial markets, but confirmation that price pressures
remain muted could be a boost for U.S. Treasury debt after
heavy selling last week on fears the tax deal would further
inflate an already bloated budget deficit.

Treasury debt yields briefly touched six-month highs on
Monday before retreating as buyers waded back into the market.
(Reporting by Lucia Mutikani, editing by Neil Stempleman)

PREVIEW-US core CPI seen +0.1 pct, CPI +0.2 pct in Nov