Even more importantly, inflation rates surprisingly decelerated in November, showing a breathtaking new turn in economic history. The annual inflation rate fell to 2.6%, down from 3% in September, signaling a potential easing of consumer price pressures. Annual inflation has just released and that number is the lowest it’s been since last July. This drop is welcomed news for consumers and lawmakers alike.
From September to November, consumer prices only increased by 0.2%. The more basic CPI, the core CPI that leaves out the volatile food and energy prices, rose 0.2% in this same period. Meanwhile, the annualized inflation over the past two months has fallen to a mere 0.1%. That usually means that inflation has decelerated a lot. Economists had expected a bigger increase of 0.3% month-over-month for November, so those results are much higher than expected.
The CPI ex food and energy — the core CPI — index reflects a much more subdued inflationary picture. From September through November, it cumulatively averaged a scant 0.1% on a monthly basis. This key, closely watched measure of underlying inflation cooled in November, showing once again that a trend toward more stabilizing prices may be taking hold. Even with all these positive changes the Consumer Price Index still increased 2.7% from last year. While this is good news for workers, it does underline the continued longer-term squeeze of inflation.
The recent government shutdown dumped a big wrench into the usual timely processing of important economic data. Therefore, unlike in previous reports, we cannot include the October inflation figures in this report. Consequently, it left analysts and policymakers armed without critical – and telling – insights into that month’s economic landscape.
Last month, September, inflation was 3%. On a month-to-month basis, consumer prices were up 0.3%. The dramatic difference between September and November highlights just how quickly consumer price trends have changed in a matter of months. At the same time inflationary pressures are coming down. Now we should wait to see how this important change will boost consumer spending and help drive economic growth going forward.