A carton of large white eggs at Save Mart in Fresno, California, costs $6.49 for ten eggs on Monday, August 19, 2024.
Fernanda Galan | Fresno Bee | Tribune News Service | Getty Images
Consumer prices rose at a faster annual pace in November, suggesting that inflation remains an issue for households and policymakers.
The Consumer Price Index showed a 12-month inflation rate of 2.7% after a 0.3% increase during the month, the Bureau of Labor Statistics reported Wednesday. The annual rate was 0.1 percentage point higher than in October.
Excluding food and energy costs, core CPI was 3.3% y/y and 0.3% m/m. The 12-month core reading was unchanged from a month ago.
All numbers were in line with Dow Jones estimates.
The readings come as Fed officials ponder what to do at their policy meeting next week, and markets strongly expect the Fed to cut its benchmark short-term borrowing rate by a quarter of a percentage point when the meeting concludes on December 18, but then skip it. . January as they measure the impact of successive cuts on the economy.
While inflation is a long way from the 40-year high seen in mid-2022, it is still above the Federal Reserve's annual target of 2%. Some policymakers in recent days have expressed frustration with the resilience of inflation and indicated that the pace of interest rate cuts may need to slow if more progress is not made.
If the Fed follows through with its decision to cut next week, it will have cut a full percentage point from the federal funds rate since September.
Most of the increase in November's CPI came from shelter costs, which rose 0.3% and were one of the most challenging components of inflation. Fed officials and many economists expect housing-related inflation to decline as new leases are negotiated, but the item has continued to increase each month.
The Bureau of Labor Statistics estimates that the shelter component, which has a weight of about one-third in calculating the CPI, accounted for about 40% of the total increase in November. The Shelter Index rose 4.7% on a 12-month basis in November.
Used car prices rose 2% month on month while new car prices rose 0.6%, reversing a recent trend that has seen these items decline.
Elsewhere, food costs rose 0.4% month-on-month and 2.4% year-on-year, while the energy index increased 0.2% but fell 3.2% year-on-year.
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