Although consumer prices remained close to a multi-decade high in November, inflation moderated more than anticipated, continuing to put pressure on millions of American households and small businesses.
The consumer price index, which measures a variety of prices for goods and services such as gasoline, groceries, and rent, increased by 0.1% from October to November, according to data released by the Labor Department on Tuesday. On an annual basis, prices increased by 7.1%.
Both of those numbers were below the 7.3% headline figure and the 0.3% monthly increase predicted by Refinitiv economists, which may have been encouraging for the Federal Reserve as it attempts to rein in runaway inflation through a series of brisk interest rate increases. Since December 2021, it represented the lowest annual inflation rate.
Another indicator that the economy's underlying inflationary pressures are beginning to ease is that November's increase in core prices, which exclude volatile categories like food and energy, was 0.2% rather than the 0.3% seen in October. Core prices increased 6% from this time last year.
Core prices were expected to increase 6.1% from the previous year and by 0.3% on a monthly basis, according to economists.
On the strength of the better-than-anticipated report, stocks rose and futures for the Dow Jones Industrial Average increased by more than 700 points. S&P 500 and Nasdaq futures both increased by 2.8% and 3.9%, respectively.
According to the report, the cost of used cars, health care, and airline tickets all decreased last month. Although inflation has slowed down, prices are still significantly higher than the Fed's 2% target.
