The consumer price index (CPI) showed a 12-month inflation rate of 2.7% after increasing 0.3% on the month in November, in line with analyst forecasts. The annual rate was 0.1% higher than October, the Bureau of Labor Statistics reported Wednesday, Dec. 11.
Excluding food and energy costs, the core CPI was at 3.3% on an annual basis, with the 12-month core reading unchanged from a month ago. The Federal Reserve is weighing whether to cut interest rates for the third and final interest rate decision this year at its meeting next week.
Used cars and trucks led November price hikes, with cereals and bakery items dropping compared to October. Overall food costs rose 0.4% monthly and 2.4% year over year, while the energy index increased 0.2% but was down 3.2% annually.
Grocery prices in November went up the most in almost two years, with eggs jumping 8.2% from October amid a bird flu outbreak. Beef was up 3.1% monthly, ham rose 3.9%. The cost of eating went down a bit from October, but was still 3.4% higher than a year ago.
Inflation is now close to its pre-pandemic level, although it remains above the Fed’s 2% annual target, according to White House National Economic Council Director Lael Brainard. In the middle of 2022, inflation hit a 40-year high of 9.1%.
Economists have said they expect fewer interest rate cuts next year. The next meeting of the Federal Reserve is expected drop the key interest rate by a quarter percentage point in an effort to normalize rates since the overall rise in prices has slowed.
Since September 2024, the Fed has been lowering interest rates following hikes seen in 2022 and 2023. The current rate of about 4.6% remains above the 2.9% required to keep the economy growing at a “sustainable” rate.