The U.S. Labor Department reported today that the ‘headline’ consumer price index fell 0.3% in November, primarily because of a big drop in gasoline prices. In the past year, consumer prices have risen 1.8 percent.

You can read the full report here

This headline number – technically called the Consumer Price Index for All Urban Consumers (CPI-U) –  is the one watched by holders of inflation-adjusted TIPS and I Bonds. The decline in November means a 0.3% decrease in the principal balance of a TIPS, and will cause a lower future interest rate for I Bonds.

The Federal Reserve watches the ‘core’ inflation rate, minus food and energy. This index rose 0.1% in November, which continues a trend of mild inflation.

This fall’s decline in gas prices has offset a late-summer bump in inflation, as shown in this chart generated by the Labor Department:

From the Associated Press report:

“In simplest terms, inflation is not a problem,” Jim Baird, chief investment strategist at Plante Moran Financial Advisors, said. Lower inflation “is a real positive that should provide modest relief for households dealing with limited income growth.”

High unemployment and slow wage growth have made businesses reluctant to raise prices. Many worry higher prices could drive away customers. That’s helped keep inflation tame.