Inflation increased in November in the final significant report ahead of Fed meeting

Author(s):

Austin Littrell

Key Takeaways

November's inflation rate reached 2.7% annually, with a 0.3% monthly increase, slightly above October's rate.
Core inflation, excluding food and energy, rose 0.3% in November, marking a 3.3% year-over-year increase.
The medical care index increased by 0.3% monthly, with a 3.1% annual rise, while medical care services rose 3.7% year-over-year.
Shelter costs rose 0.3%, contributing nearly 40% to the monthly inflation increase, while energy prices declined 3.2% annually.
The Federal Reserve will consider these inflation figures in their December meeting to decide on potential interest rate adjustments.

CPI increased 0.3% in November, good for a 2.7% year-over-year increase.

Inflation increased in November, the US Bureau of Labor Statistics reported Wednesday. The consumer price index (CPI), which measures the change in prices paid by consumers for goods and services, showed a 12-month inflation rate of 2.7% after increasing by 0.3% for the month. The annual rate was 0.1% higher than October.

Excluding food and energy sectors, core inflation rose 0.3% in November, as it did in each of the previous three months, registering a 3.3% increase, year-over-year. Indexes that trended upwards in November include medical care, shelter, new vehicles, used cars and trucks, household furnishings and operations and recreation.

The medical care index rose 0.3% in November, the same as it did in October. The physicians’ services index similarly increased 0.3% over the month, the prescription drugs index fell 0.4% and the hospital services index remained unchanged. In total, the medical care index saw a 3.1% year-over-year increase.

Medical care services were up 0.4%, the same as they were in October, and have increased 3.7% compared to a year ago. Medical care commodities dropped 0.1% in November, good for a 12-month increase of 0.4%.
The report revealed that the index for shelter rose 0.3% in November, accounting for nearly 40% of the overall monthly inflation increase. The food index also climbed 0.4%, with the food at home index rising by 0.5% and the food away from home index increasing 0.3%. Energy prices edged up by 0.2% after remaining unchanged in October. Year-over-year, the all-items index increased by 2.7%, slightly higher than the 2.6% recorded in October. Energy prices showed a notable 3.2% decline in November, while food prices rose by 2.4%.

Federal Reserve policymakers will gather December 17-18 to determine whether or not to cut interest rates for the third and final time of 2024 in order to achieve their targeted 2% yearly inflation. The personal consumption expenditures (PCE) measure is the Fed’s preferred index, but because that will not be released until December 20, the CPI is the final significant inflation report prior to the Fed’s meeting.