United States: Inflation climbs higher in November
Consumer prices rose 0.3% month-on-month in November, down from the 0.4% rise in October reading and a notch above market expectations of a 0.2% increase. Another sharp rise in energy costs—due to higher gasoline prices—a sharp increase in the cost of used cars and trucks, and higher prices for shelter drove the print. Conversely, price gains for food and medical care softened in the month. Core consumer prices—which exclude volatile items such as food and energy—rose 0.2% in November, matching September’s increase.
Inflation edged up to 2.1% in November from 1.8% in October, overshooting market expectations of 2.0%. On the other hand, core inflation was stable at 2.3%. However, the core PCE price index—an indicator closely followed by the Fed—inched down to 1.6% in October from 1.7% in September, the latest month for which data is available, continuing to track below the Fed’s 2.0% target.
Firming inflation, albeit gradually, alongside a solid November jobs report is likely to reassure the Fed that its current policy stance is suitable for the time being as its previous rate cuts continue to pass through to the economy.