In November, the United States saw a slight dip in inflation, with the year-on-year Consumer Price Index (CPI) settling at 3.1%, compared to the previous month’s 3.2%, as reported by the Department of Labor on Tuesday.
The monthly CPI edged up by 0.1%, just above analysts’ expectations. Meanwhile, core inflation, excluding volatile food and energy prices, remained stable at 4.0% year-on-year, marking its lowest level in over two years.
Economist Michael Pearce from Oxford Economics noted that it was the first time in a year that core inflation did not ease. He highlighted concerns about the rising core inflation in the services sector and the soaring costs of housing.
The moderation in November’s inflation was primarily attributed to lower fuel prices, whereas food prices increased but at a slower pace: 2.9% for the overall food category and 1.7% for food consumed at home. Notably, takeout and restaurant meals experienced a more pronounced rise, surging by 5.3%.
Used cars and healthcare services witnessed decreases in prices, contributing to the overall moderation.
President Joe Biden, campaigning for reelection in 2024, acknowledged the “continued progress” in bringing inflation to a more acceptable level and reducing the cost of living for Americans.
Treasury Secretary Janet Yellen expressed confidence that inflation would return to the Federal Reserve’s target of 2%. Despite these positive sentiments, certain sectors, particularly housing and transportation, experienced increases above the average, posing challenges.
The Federal Reserve began its final policy meeting of the year on Tuesday, aiming to determine whether to maintain interest rates for the third consecutive meeting within the 5.25% to 5.50% range. The decision of the Federal Open Market Committee (FOMC) is expected on Wednesday at 19:00 GMT, with most analysts anticipating the preservation of the current interest rate levels, according to CME FedWatch.