Consumer inflation in the US cooled unexpectedly in November, the Bureau of Labor Statistics said in its latest update, which had been delayed due to the federal government shutdown.
In the report released on Thursday, the Labor Department reported that its consumer price index (CPI) was up 2.7% in November, lower than the 3.1% expectation of economists polled by Reuters.
The CPI had increased 3% in 12 months leading up to September.
Breaking down the numbers
For the latest numbers, the BLS said that grocery costs had risen by 1.9% overall, with dairy products seeing a 1.6% decrease in prices from a year ago. On the flip side, protein prices soured by 4.7%, while non-alcohol drinks also saw their prices go by 4.3%.
The latest data also revealed that eating out was getting more expensive, with full service restaurant prices rising by 4.3% and limited service eatery prices rising by 3.0%.
As for energy prices, gasoline prices remained largely stable, rising by 0.9%. In comparison, fuel oil, natural gas, and electricity prices increased by 11.3%, 9.1%, and 6.9%.
Core CPI, which strips out volatile food and energy prices, meanwhile rose by 2.6% as of November, a 0.2% uptick over the two months ending November.
This was driven by an a 3.0% increase in the shelter index, a 4.6% increase in household item prices, a 3.6% increase in used car prices, and a 2.9% increase in medical care costs.
The November report is the first following the record 43-day long US government shutdown, which resulted in the October released getting cancelled.
Reuters reported that the unexpectedly low CPI number was likely technical, the result of delayed data collection and holiday season discounts, adding that economists expect an uptick in retail inflation in December.
‘Absolute blockbuster report’
However, Kevin Hassett, the White House National Economic Council Director and the likely replacement for outgoing Federal Reserve Chair Jerome Powell, hailed the report as one signalling positive signs for the US economy.
Speaking to Fox Business, Hassett called the data release an “absolute blockbuster report,” adding, “I’m not saying we’re going to declare victory yet on the price problem, but this is just an astonishingly good CPI report.”
The data release also comes weeks after the Fed cut rates by 25 bps for a third consecutive time this year, and if the data is taken at face value, combined with latest data on rising unemployment, it could add to more pressure on the central bank to cut rates in 2026.