US inflation fell again and reached its lowest level in five months

US inflation fell again and reached its lowest level in five months

The annual inflation rate in the US slowed to 3.1% in November 2023, the lowest reading in five months, from 3.2% in October and in line with market forecasts.

However, compared to October, consumer prices rose 0.1%, compared to expectations for a flat reading. Core inflation continued to show some rigidity: the annual base rate remained at 4% and the monthly rate increased from 0.2% to 0.3%, in line with forecasts.

Bittersweet CPI

The so-called core consumer price index, which excludes food and energy costs, rose 0.3% after a 0.2% gain in October, according to government figures. Compared to a year ago, it advanced 4% for the second month in a row.

Economists favor the basic metric as a better measure of inflation trends than the headline CPI. That measure rose slightly after seeing little change in October. Compared to a year ago, it increased 3.1%.

Tuesday’s data underscores the volatile nature of the process of bringing inflation back on line. While price pressures have largely eased from multi-decade highs, a still strong labor market continues to boost consumer spending and the broader economy.

Now, Federal Reserve officials begin a two-day meeting Tuesday that is expected to culminate in keeping interest rates stable again. Chairman Jerome Powell will likely reiterate that he and his colleagues want to see a more sustainable pullback in price growth before easing policy.

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