BY EMMANUEL OGBONNA
U.S. inflation eased more than economists had anticipated in November, according to a government report released Thursday that was delayed by weeks and potentially skewed by the prolonged federal government shutdown, complicating efforts to assess the true direction of price pressures in the economy.
The Labor Department said consumer prices in November were 2.7% higher than a year earlier, a notable slowdown from September and below expectations. Even so, inflation remains well above the Federal Reserve’s long-standing 2% target, and many Americans continue to express frustration over the persistent cost of essentials such as food, housing, energy and utilities.
The inflation report was released eight days later than scheduled after a 43-day government shutdown disrupted data collection and analysis across federal agencies. The shutdown also prevented officials from compiling full consumer price figures for October, leaving a significant gap in the inflation timeline. As a result, Thursday’s data marked the first official update on consumer prices since September figures were released in late October.
In September, inflation stood at 3% on a year-over-year basis, and most forecasters had expected the November reading to come in at roughly the same level. Instead, the decline surprised markets, though economists cautioned that the unusual circumstances surrounding the data could limit its reliability.
Energy prices rose sharply during the month, increasing 4.2%, driven largely by higher fuel oil costs. When volatile food and energy prices are excluded, core inflation rose 2.6% from a year earlier. That marked a slowdown from the 3% pace recorded in September and represented the lowest core inflation reading since March 2021.
Despite the moderation, inflation remains stubbornly elevated, in part due to trade policies that have raised the cost of imported goods. President Donald Trump’s decision to impose double-digit taxes on imports from a wide range of countries, along with targeted tariffs on products such as steel, aluminum and automobiles, has added upward pressure to prices across the economy.
So far, those tariffs have not triggered the sharp inflation surge many economists initially feared. Still, they have complicated the Federal Reserve’s policy decisions as it weighs whether to continue cutting interest rates to support a weakening job market or pause to prevent inflation from becoming entrenched. The central bank last week lowered its benchmark interest rate for the third time this year but signaled that policymakers currently expect only one additional cut in 2026.
Market analysts urged caution in interpreting the November inflation data. Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management, described the figures as “noisy,” noting that the absence of October data makes month-to-month comparisons impossible. She also warned that the shortened data collection process during the shutdown may have introduced systematic biases.
Because of those uncertainties, Haigh said policymakers are likely to place greater weight on the December inflation report, due to be released in mid-January, just two weeks before the Federal Reserve’s next policy meeting. That report is expected to offer a clearer signal of underlying inflation trends.
The inflation figures were released a day after President Trump delivered a nationally televised prime-time address in which he sought to assign blame for economic challenges to Democrats. The speech echoed recent messaging from the White House but did little to ease public concern over the rising cost of living.
While Trump has repeatedly promised a strong economic rebound, inflation has remained elevated and the labor market has shown signs of strain following the introduction of broad import taxes. With incomplete data and mixed signals from prices and employment, policymakers, businesses and consumers alike are left navigating an uncertain economic landscape as the new year approaches.
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