US consumer prices rose 0.3% in November, the largest gain in seven months, according to the Labor Department’s Bureau of Labor Statistics. Shelter costs, mainly driven by hotels and motels, increased by 40% of the total rise.
The increase in food prices, led by eggs and beef, was also notable, with grocery store food prices surging 0.5%. On the other hand, cereal and bakery products fell by 1.1%, the largest decline since 1989.
The core Consumer Price Index (CPI), which excludes volatile food and energy components, remained unchanged at 0.3% for the fourth consecutive month. Rents, including owners’ equivalent rent, increased at their slowest pace in nearly 3-1/2 years, with the smallest gain since July 2021.
The moderation in inflation has given policymakers some hope, but the outlook remains uncertain due to looming tariffs and a cooling labor market. Despite this, investors took comfort from the data, with stocks trading higher and the dollar rising against major currencies. The Federal Reserve is expected to deliver a third consecutive interest rate cut next week, which will be closely watched for its impact on inflation.
Economists expect the core CPI to rise 3.3% in the year ahead, slightly above expectations. However, concerns over tariffs and immigration could offset the benefits of slower inflation, making it challenging for policymakers to achieve their 2% target. The Fed’s benchmark interest rate remains at 4.50%-4.75%, a significant increase from last year.
Source: https://www.reuters.com/markets/us/us-consumer-prices-post-largest-gain-seven-months-november-2024-12-11