U.S. Inflation Slows to 2.7% in November/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. consumer prices rose 2.7% year-over-year in November, a slower-than-expected increase that still exceeds the Federal Reserve’s 2% target. The report, delayed by a government shutdown, showed easing core inflation but highlighted ongoing cost pressures. President Trump’s tariffs continue to impact prices, while the job market weakens.
U.S. Inflation Trends in November: Quick Looks
- Consumer Price Index (CPI) rose 2.7% year-over-year in November.
- Core inflation, excluding food and energy, rose 2.6% — the lowest since March 2021.
- Energy prices surged 4.2%, led by higher fuel oil costs.
- Inflation slowed from September’s 3% annual increase.
- November’s report was delayed due to a 43-day government shutdown.
- No October CPI data was published, making month-to-month comparisons unreliable.
- Trump’s broad import tariffs continue to pressure consumer prices.
- The Fed cut rates last week for the third time this year.
- Only one more rate cut is expected in 2026, Fed signals show.
- Public discontent continues as inflation hits housing, groceries, and utilities.
Deep Look
Inflation Slows to 2.7% in November, but Cost Pressures Remain Elevated
WASHINGTON, D.C. – U.S. inflation eased more than expected in November, offering a glimmer of relief for policymakers and consumers alike. However, prices remain high across key categories, keeping the cost-of-living crisis alive and well for many Americans.
The Consumer Price Index (CPI) rose 2.7% over the past 12 months, the Labor Department reported Thursday. This marks a slowdown from the 3% year-over-year rise in September, and below what analysts had anticipated. Yet inflation still exceeds the Federal Reserve’s 2% target, complicating decisions for central bank officials and amplifying frustration among households.
The data release had been delayed by eight days due to the recent 43-day federal government shutdown, which also prevented the collection of inflation statistics for October, disrupting month-to-month comparisons.
Energy Prices Drive Monthly Gains
One of the main contributors to the still-high inflation rate was energy. Fuel oil prices surged, helping push overall energy costs up 4.2% in November. That increase offset milder gains in other categories and continues to squeeze consumer budgets, particularly during the winter season.
Stripping out volatile energy and food prices, core inflation rose 2.6% year-over-year, the lowest rate recorded since March 2021. The moderation in core prices could offer hope that inflationary pressures are cooling, but analysts warned the data may be skewed by the shutdown’s impact on data collection.
Shutdown Skews Inflation Data
Kay Haigh, global co-head of fixed income and liquidity at Goldman Sachs Asset Management, described the report as “noisy,” due to the loss of October data and an incomplete data-gathering process in November.
“With no October numbers, it’s hard to compare month-to-month. There’s also concern about systemic biases due to the shutdown,” Haigh noted. “The Federal Reserve will likely focus on the December CPI, due out in mid-January, for a clearer view on inflation before its next meeting.”
Fed Rate Cuts and Economic Outlook
The Federal Reserve, responding to a weakening job market and persistent inflation, cut its benchmark interest rate for the third time in 2025 just last week. However, Fed officials signaled they expect only one more rate cut in 2026, reflecting caution in the face of price instability.
Economists say the Fed is navigating a delicate balance between keeping inflation in check and supporting a labor market that is showing signs of strain.
Tariffs Fuel Price Pressures
Despite the easing in headline inflation, prices remain elevated partly due to President Donald Trump’s sweeping trade policies. The Trump administration has imposed double-digit tariffs on imports from nearly every country, alongside targeted duties on goods like steel, aluminum, and automobiles.
While economists initially feared the tariffs could trigger runaway inflation, the actual impact has been more modest — though still significant. The tariffs continue to exert upward pressure on prices, especially for manufactured goods and imported consumer items.
The inflationary effect of tariffs has also made it harder for the Federal Reserve to justify more aggressive rate cuts, contributing to the complex economic landscape ahead of the 2026 election season.
Public Discontent and Political Ramifications
In a prime-time televised address Wednesday, President Trump sought to reassure the public about the direction of the economy. However, he largely focused on blaming Democrats for high prices, offering little in the way of new policy solutions.
The speech repeated familiar messaging about Trump’s promise of economic revival. Yet grocery bills, utility costs, housing prices, and transportation fees remain elevated, and public frustration has not eased.
Economic anxiety persists despite slowing inflation, as wages lag behind price increases and job creation slows under the weight of higher interest rates and trade-related disruptions.
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