Progress on inflation stalled in November as prices rose
Prices rose by 2.7 percent annually in November, up slightly from earlier in the fall.
Inflation also increased 0.3 percent from October to November, faster than the previous monthly increase.
The fresh data underscores the economic concerns of Americans, who voted out incumbents in federal elections last month even as inflation eased for the year. Overall prices remain much higher than in 2019, just before the coronavirus pandemic.
Federal Reserve Chair Jerome H. Powell said last week that the central bank could move cautiously to continue cutting interest rates. The economy is in strong shape overall, he said, but inflation remains above the central bank’s 2 percent target.
“Growth is definitely stronger than we thought, and inflation is coming a little higher,” Powell said at a Dec. 4 conference hosted by the New York Times. “The good news is that we can afford to be a little more cautious” lowering interest rates to the point that they neither restrict nor spur economic growth, he added.
Powell and other Fed officials have said they are closely monitoring upcoming economic data without tipping their hand about what they will do at their policy meeting next week.
The data has been somewhat mixed, with the Fed’s preferred inflation gauge — personal consumption expenditures — rising to 2.3 percent annually in October, matching expectations but above a 2.1 percent annual rate in September.
“The labor market remains solid, and inflation appears to be on a sustainable path to our 2 percent goal, even if there have been some bumps along the way,” Fed Gov. Adriana Kugler said last week, speaking in Detroit.
Investors in the futures market signaled that they expect yet another quarter-percentage-point cut at the Fed meeting, although the pace of additional cuts next year is uncertain.
Investors were betting on a nearly 90 percent likelihood of a quarter-point cut at the Dec. 17-18 meeting, according to CME Group.
The recent run-up in prices has weighed on the hearts, minds and pocketbooks of Americans, and political leaders got a heavy dose of inflation-related anger just last month, as Republicans took the White House, the Senate and the House. Three in 10 voters — including 6 in 10 voters for Donald Trump — said they were “falling behind” financially, a 50 percent increase from 2020, according to AP VoteCast exit polls.
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