November Inflation - Steady as She Goes

In November, consumer prices as measured by CPI, rose 2.7% compared to a year ago, up from 2.6% in October and in line with expectations.  Core CPI (excludes volatile food and energy prices) rose 3.3%, unchanged from September and also in line with expectations.  While price pressures have subsided from the pandemic-era peak of 9.1%, progress appears to have leveled off more recently.  This, coupled with evidence that the labor market remains on solid footing should support an argument for a more gradual pace of interest rate cuts going forward.  Fed policymakers cut rates 0.50% cut in September and 0.25% in November.  Investors are pricing in another 0.25% cut in December and two to three 0.25% cuts in 2025.

• Consumer prices (CPI) increased 2.7% year-over-year. In November, the consumer price index (CPI) increased 2.7% – in line with expectations but up from 2.6% in October and 2.4% in September.  Transportation services (+7.1%) and shelter (+4.7%) were key contributors to the overall increase, more than offsetting declines for used vehicles (-3.4%).  We continue to keep a close eye on shelter costs, which represent nearly one third of the consumer price index and tend to impact the index with a lag.  At +4.7% year-over-year, shelter inflation decelerated from +4.9% in October, down from a peak of 8.2% in March 2023.  Core CPI (excludes food and energy) increased 3.3% year-over-year, unchanged from October and in line with expectations.
• Consumer prices (CPI) increased 0.3% month-over-month.  In November, consumer prices rose 0.3% compared to October.  Expectations ranged from +0.2% to +0.3% with a median of +0.3%.  Shelter costs increased 0.3% (down from +0.4% in October).  Core CPI (excludes food and energy) increased 0.3% month-over-month, unchanged from October and in line with expectations.