Inflation ticked slightly down year-over-year in November but continued to remain well above the Federal Reserve’s target, according to the latest Bureau of Labor Statistics (BLS) release on Tuesday.
The consumer price index (CPI), a broad measure of the prices of everyday goods, increased 3.1% on an annual basis in November, compared to 3.2% in October, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained high, rising 4.0% year-over-year in October, compared to 4.0% in October. (RELATED: Here’s How Much Americans’ Home Payments Have Increased Under Biden)
“The much smaller year-over-year headline CPI change from October to November (vs. the large decline from September to October) suggests a slowing of disinflation, while the core CPI year-over-year being flat at 4.0% is still substantially elevated at twice the Fed’s target range,” Peter Earle, economist at the American Institute for Economic Research, told the Daily Caller News Foundation.
“The month-to-month headline number being unchanged is to be expected with the AAA’s daily national average gasoline price (regular) having fallen over 70 cents per gallon since mid-September,” Earle continued. “But the increase in the core CPI on a month-to-month basis — again, if the surveys are correct — is a cause for concern. Those prices are headed in the wrong direction.”
Shelter continued to be a top contributor to inflation, rising 0.4% in the month of November, totaling 6.5% for the year, according to the BLS. The prices for used cars and trucks increased 1.6% month-to-month, while the cost of transportation increased 1.1% for the month.
Overall inflation was brought down by decreases in the price of energy commodities, with the price of gasoline declining 6% in November, totaling an 8.9% drop for the year, according to the BLS. The price of apparel also dropped, declining 1.3% month-to-month.
The FOMC is set to announce the last federal funds rate decision of the year on Wednesday, with the current rate in a range of 5.25% and 5.50%, the highest point in 22 years. The rate was set to its high position in an effort to calm inflation, which peaked at 9.1% in June 2022, far higher than the Fed’s 2% target.
The economy sustained above-trend growth in the third quarter of 2023, with gross domestic product rising 5.2% year-over-year, greater than the 2.1% that was seen in the second quarter of this year. Analysts are mixed on recession predictions for 2024, with strong growth but persistent inflation leaving mixed signals of the U.S. economy’s strength.
Since Biden took office, costs have risen over 17%, while average hourly wages have only risen 13.6% as of November. The resulting price increases mean that families have to pay more than $11,000 in additional costs to maintain the same standard of living.
Americans maintain a negative view of the economy, with 72% of respondents saying the economy is getting worse while 23% say it is getting better, according to a poll from Gallup conducted from Nov. 1 to 21. Inflation was ranked as the most important financial problem facing families in 2023 by 35% of respondents, compared to just 8% of families in 2021.
“I don’t see the Fed hiking again before the end of this year,” Earle told the DCNF. “But I definitely think that it’s too early to start talking about rate cuts, which is what a lot of economy watchers are already focusing on.”
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