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Consumer prices rose less than expected in November, the second-straight month inflation pressures moderated more than anticipated by economists. The Consumer Price Index (CPI) for November showed a 7.1% increase in prices over last year and a 0.1% increase over the prior month, the Bureau of Labor Statistics said Tuesday. Economists had expected prices to rise at a 7.3% clip over last year and 0.3% month-over-month, per Bloomberg data.
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While Americans still faced higher costs for rental housing, economists expected a moderation next year. The report was published as officials at the U.S. central bank gathered for their final two-day policy meeting of the year. The Fed, in the midst of its fastest rate-hiking cycle since the 1980s, is expected to lift its benchmark overnight interest rate by 50 basis points Wednesday, snapping a string of four straight 75-basis-point increases. Economists still expected the Fed to maintain its monetary policy tightening campaign at least through the first quarter of 2023.
Why it matters
Annual inflation is slowing in part as last year's big increases drop out of the calculation. The Fed's aggressive monetary policy stance is also dampening demand. The tamer inflation readings added to recent reports showing improvements in consumers' inflation expectations in December. Excluding the volatile food and energy components, the CPI increased by 0.2%. That was the smallest gain in the so-called core CPI since August 2021 and followed a 0.3% rise in October. The core CPI was restrained by prices for used cars and trucks, which dropped 2.9% and were down for a fifth straight month.
