Consumer price increases in the United States came in below expectations for November, fueling optimism among investors that inflationary pressures are weakening and the Federal Reserve may have room to relax its policy stance more than financial markets had projected.
The November figures represent the first consumer price index (CPI) report covering the time period when a government shutdown halted regular operations and impacted data collection. The shutdown also forced the cancellation of the October inflation report.
According to delayed data from the Bureau of Labor Statistics, the CPI registered a 2.7% year-over-year gain last month, undershooting the 3.1% rise forecast in a Dow Jones survey of economists. Similarly, core inflation—which excludes the more volatile food and energy sectors—was also lower than estimated, rising 2.6% from a year earlier versus the 3% anticipated.
Due to the missing October dataset, the agency noted this latest inflation assessment is missing some standard elements typically included in the monthly CPI report. In its statement, the BLS indicated it could not reconstruct the October data and instead relied in part on non-survey data sources for certain components of the index.
Despite the data limitations, market participants scrutinized the findings for clues about the Federal Reserve’s future policy direction. The Fed delivered its third consecutive 25-basis point cut to its benchmark rate earlier in the month. According to market pricing, there is a 26% probability that the next rate reduction could arrive as soon as January 2026.
