Inflation slowed more than expected last month, according to the Bureau of Labor Statistics’ delayed November consumer price index data.
CPI rose 2.7% over the 12 months to November, down from 3% in September and below the 3.1% economists expected. Core inflation, which excludes volatile categories like food and energy prices, fell to 2.6%.
At first glance, the numbers, which are eight days late, suggested easing price pressures. But many experts urged readers to be careful.
Due to the government shutdown, the Labor Department could not collect prices in the field, forcing the Bureau of Labor Statistics to rely on estimates and technical fixes. Economists said those methods likely understated inflation, especially for housing. Moreover, the CPI for October was canceled, so November’s data cannot be compared with the previous month.
Investors further noted that the November numbers were collected at the end of the month when holiday discounts had already begun.
Analysts opine that two factors likely pulled prices down. Black Friday sales offered lower prices than usual. Housing costs also appeared softer, as the missing October data made rent increases appear smaller.
Markets showed little concern over the data and barely reacted. Treasury yields stayed steady, showing little confidence in the numbers.
What is the Fed saying?
Officials warned that the report could be distorted. They plan to focus more on upcoming inflation reports, which should provide cleaner data and help guide decisions on interest rates, jobs, and rising costs linked to tariffs.