CPI: Inflation pressures ease in November as consumer prices clock 2.7% annual rise

Inflation Data Summary - Inflation pressures eased more than expected in November, with the Consumer Price Index (CPI) rising 2.7% year-over-year, lower than the anticipated 3.1% increase [1] - On a core basis, which excludes food and energy costs, prices increased by 2.6% year-over-year, also below the expected 3.1% [2] - The November report is significant as it is the first inflation reading since October's report was canceled due to a government shutdown, providing no month-on-month comparisons for consumer prices [2][3] Economic Context - In September, the last month with available inflation data, both headline and core CPI measures rose by 3% compared to the same month the previous year [3] - The November jobs report indicated more job creation than expected, but the unemployment rate reached a four-year high [4] - The Federal Reserve aims for a 2% inflation target, as measured by the core personal consumption expenditures (PCE) index, which showed a 2.8% increase year-over-year in the latest data [4] Market Expectations - Economists at Bank of America predict that goods inflation will remain "sticky" due to tariffs, while services inflation may soften, influenced by health insurance costs [5] - This mixed inflation dynamic is likely to keep the Federal Reserve from making rate cuts at the end of its January meeting, with a current market expectation of a 25% chance of a rate cut next month [5] - The Fed's forecasts indicate it may only cut rates one more time in 2026 after a series of cuts in late 2025 [6]