The US consumer price index (CPI) showed a 12-month inflation rate of 2.7% after increasing by 0.3% on the month, according to data released by the Bureau of Labor Statistics. Excluding food and energy costs, the core CPI was at 3.3% on an annual basis and 0.3% monthly.
The latest reading is in line with forecasts and further solidifies market expectations for a rate cut from the Federal Reserve. The CME Group’s FedWatch measure now puts the odds of a rate cut at 99%, with traders expecting a quarter percentage point reduction by December 18. While inflation remains above the Fed’s 2% target, policymakers are confident in the disinflation process and expect further gradual easing.
A slowdown in shelter costs was a notable feature of the November CPI, which rose 0.3% mainly due to increases in rent-related expenses. Housing-related inflation is expected to ease as new rental leases are negotiated. Used vehicle prices also rose by 2%, while food costs increased by 0.4%. The energy index decreased by 3.2% annually.
The increase in the CPI led to flat average hourly earnings for workers when adjusted for inflation, but a year-over-year gain of 1.3%. This data provides further insight into the ongoing inflationary pressures and their impact on the economy.
Source: https://www.cnbc.com/2024/12/11/cpi-inflation-november-2024-annual-inflation-rate-accelerates-to-2point7percent-in-november-as-expected.html