Core CPI in the United States rose by 2.6% year-on-year in November, the lowest growth rate since 2021, indicating a cooling of inflation.

Data released by the US Bureau of Labor Statistics on Thursday showed that excluding the volatile food and energy categories, the core Consumer Price Index (CPI) rose 2.6% year-on-year in November. This is down from a 3% annual increase two months ago. The overall CPI rose 2.7% year-on-year in November. This complex report, affected by the federal government shutdown notice, indicates that potential inflation in the US grew at its slowest rate since the beginning of 2021 in November, signaling a relief from persistent price pressures that have lasted for several months. Due to the government shutdown, the Bureau of Labor Statistics was unable to collect most price data for October, limiting its ability to determine broader inflation indicators for November and many key category changes on a month-on-month basis. The Bureau of Labor Statistics stated that in the two months leading up to November, the core CPI rose 0.2% month-over-month, primarily due to declines in hotel accommodation, entertainment, and clothing costs. However, prices for household goods and personal care products increased. Although there are several caveats, this report brings hope that inflation pressures are easing. Since the beginning of the year, inflation pressures have been confined to a narrow range. After the data was released, stock index futures expanded their gains, while US bond yields and the US dollar fell. It is not yet clear whether this CPI report will change the stance of Federal Reserve policymakers. There are still disagreements among them on interest rate trends for next year. Last week, the Fed cut rates for the third consecutive time to prevent a further deterioration in the labor market. Federal Reserve Chairman Jerome Powell stated last week that due to the record government shutdown continuing until November 12, the CPI data "may have been distorted." This shutdown not only led to the cancellation of the October report but also forced the Bureau of Labor Statistics to delay the collection of price data until late November, shortening the data collection period. Some economists have pointed out that this may affect the final data considering the discounts around "Black Friday." However, the Bureau of Labor Statistics stated that it has approved to extend the data collection period to collect as much data for the entire month of November as possible. Excluding food and energy items, commodity prices rose 1.4% year-on-year. This is down from 1.5% increases in August and September. Using data collected from third-party sources, the Bureau of Labor Statistics is able to report monthly price changes in specific categories, including new and used cars, and gasoline. Prices for new cars rose by 0.2%, slightly up from the previous month's 0.1% increase. The rate of increase for used car prices slowed down. Powell stated last week that he expects commodity inflation to peak in the first quarter, assuming no new major tariff measures are implemented. Service prices, excluding energy prices, rose 3% year-on-year. Ticket prices and hotel accommodation prices declined compared to the same period last year. Another service price index closely monitored by the Fed (excluding housing and energy costs) rose 2.7% year-on-year from November 2024, matching the smallest annual increase since 2021. In recent years, housing costs have been one of the main driving factors of inflation and the largest category in the service sector. Housing prices rose 3% compared to the same period last year, the smallest increase in over four years. The Consumer Price Index relies mainly on on-site visits to retail stores and service providers nationwide to collect prices for thousands of goods. This accounts for about 60% of the samples, while the remaining prices are collected through phone, internet, and third-party channels. The Bureau of Labor Statistics stated that the number of indexes composed of non-survey data is "very limited."