Consumer Price Index comes in hot again as inflation progress slows
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The Consumer Price Index rose 2.7% in the 12 months through November — a bigger increase than the prior month — while the core measure that excludes energy and food prices rose 3.3%, the Labor Department said on Wednesday.
Why it matters: Inflation has plunged since the height of the crisis, but progress on cooling it further stalled out again last month.
By the numbers: CPI ticked up from the 2.6% increase in the year ending in October, while core CPI held at 3.3%.
- On a monthly basis, CPI rose 0.3% in November, after rising by 0.2% for three straight months. Core CPI rose 0.3% for the fourth straight month.
Between the lines: Housing has been the key component keeping inflation elevated.
- Even though price gains across the category slowed slightly in November, the shelter index still accounted for almost 40% of the increase in overall inflation last month.
- The shelter index rose 0.3% in November, down a tick from October.
- Rents rose 0.2%, while owners' equivalent of rent — which gauges how much it would cost homeowners to rent their own homes — rose by a similar amount.
- The Labor Department said these were the smallest monthly increases since 2021.
Among the other categories with faster price gains: hotels. Prices jumped 3.2% after rising just 0.3% in October.
The big picture: What looked like slowing rates of price gains earlier this year has given way to fears that inflation might get stuck above the 2% level desired by policymakers.
- "Growth is definitely stronger than we thought, and inflation is coming a little higher," Federal Reserve chair Jerome Powell said at a conference hosted by the New York Times last week.
- The Fed has cut interest rates by a combined 0.75 percentage point since September, when it looked like policymakers needed to worry more about the labor market — and less about inflation.
- That might no longer be the case: the Fed is likely to cut rates at the end of its two-day policy meeting next week, though it is unclear how officials see rates evolving in 2025.
Go deeper: Understanding Powell's Fed plan for Trump 2.0
Editor's note: This story was updated with additional context and a new chart.
