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.
