U.S. inflation slowed in November, easing after months of rising prices and coming in below economists’ expectations, according to new government data released Thursday.
Consumer prices increased 2.7% compared to a year earlier, down from 3% in September, the most recent month with complete data available.
First Full Inflation Report Since Shutdown
The November report marked the first comprehensive look at inflation in nearly two months after a 43-day government shutdown disrupted data collection. The Bureau of Labor Statistics had previously issued only partial price data for October.
Some Prices Still Rising
Despite the overall slowdown, several everyday items continued to see sharp increases. Coffee prices surged nearly 19% year over year, while beef prices climbed close to 16%.
Egg prices, however, moved sharply in the opposite direction, dropping 13% compared to November 2024.
Economic Warning Signs Persist
The inflation report arrives amid growing signs of economic strain. Hiring slowed notably in November, with employers adding 64,000 jobs, down from 119,000 in September. The unemployment rate also ticked up to 4.6%, its highest level since 2021.
Consumer spending showed weakness as well. Retail sales were flat in October despite the start of the holiday shopping season, according to Census Bureau data.
Federal Reserve Balancing Act
Last week, the Federal Reserve cut its benchmark interest rate by a quarter point in an effort to support the cooling labor market. The move marked the Fed’s third rate cut this year, bringing rates to a range of 3.5% to 3.75%.
Fed Chair Jerome Powell said policymakers face a “challenging situation” as they try to balance slowing inflation with signs of weakening employment. The central bank is set to meet again next month, with markets expecting rates to remain unchanged, though a further cut remains possible.
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