A employee shares angus beef high sirloin filets within the meat part of a grocery retailer in Washington, D.C.
Tom Williams | Cq-roll Name, Inc. | Getty Photos
Inflation slowed unexpectedly in November, as a deceleration throughout a variety of shopper merchandise outweighed worth pressures in classes like gasoline — however economists mentioned the numbers must be interpreted with warning resulting from spotty information assortment throughout the federal government shutdown.
The patron worth index, a key inflation barometer, rose 2.7% in November from a yr earlier, the Bureau of Labor Statistics reported Thursday.
That was a slowdown from a 3% inflation fee in September, the final month of accessible information, and got here in lower than expected.
“Inflation fell fairly sharply,” mentioned Thomas Ryan, a North American economist at Capital Economics.
“[But] I feel we’re barely suspicious of a few of these numbers, to be sincere,” he mentioned. “It wasn’t a regular month.”
First CPI report since shutdown ended
The CPI report issued Thursday was the Bureau’s first because the record-long authorities shutdown ended final month.
The BLS did not accumulate inflation information for October and was solely in a position to collect information for roughly half of November because of the shutdown, which ran from Oct. 1 to Nov. 12.
That offers the general public an incomplete view of how shopper costs have moved in latest months, economists mentioned.
It additionally could have skewed sure information readings. For instance, because the authorities’s information pattern occurred from the center to finish of November, costs for items could have inadvertently captured extra Black Friday gross sales and seemed artificially low, Ryan mentioned.
So-called “core” items inflation — i.e., bodily items minus these tied to meals and power — fell to 1.4% in November from 1.5% in September, based on the Bureau’s report.
Many economists anticipated upward stress on items costs to persist a minimum of partway into subsequent yr because of the Trump administration’s tariff coverage.
“I feel we should always completely take the outcomes with a grain of salt, given these technical points we’re speaking about,” mentioned Tom Porcelli, chief economist at Wells Fargo. “It is a very messy report.”
Previous to the November studying, the inflation fee had been edging up step by step since April, when it was at 2.3%.
If one have been to take this CPI report at face worth, “it appears like inflation is coming again down,” Ryan mentioned.
If that pattern have been to persist, it might be good for customers’ wallets since it might imply costs are rising extra slowly and that their wages after accounting for inflation would usually enhance, Ryan mentioned.
It may also give the inexperienced gentle to the Federal Reserve, the U.S. central financial institution, to chop rates of interest subsequent yr and relieve some stress on debt holders, he mentioned.
Some economists are skeptical of inflation’s trajectory, nevertheless.
“As soon as the entire mud settles, I feel the story on inflation is, it actually hasn’t moved all that a lot,” Porcelli mentioned.
Fed policymakers appear to be extra targeted on the labor market, which has confirmed indicators of cooling, fairly than inflation, mentioned Joe Seydl, a senior markets economist at J.P. Morgan Personal Financial institution.
“I feel inflation has taken a again seat to the labor market information,” Seydl mentioned.
Slowing wages must also put downward stress on inflation within the companies sector of the economic system, mentioned Seydl, because it tends to be extra delicate to labor prices.
Slowing inflation does not imply affordability
Moreover, declining inflation does not imply the identical factor as falling costs, economists mentioned.
Inflation measures the speed of change of costs, whereas affordability is extra concerning the precise worth stage, Seydl mentioned.
A College of Michigan shopper sentiment survey from November showed rising frustration over excessive costs amongst households. The share of customers that spontaneously talked about the unfavourable results of excessive costs on their private funds rose for the fifth consecutive month, to 47%, up from 34% in January 2025, based on the survey.
“Whereas the speed of change has slowed down, the value stage continues to advance, and that is what individuals are feeling,” Porcelli mentioned.
Meals is likely one of the main classes the place customers are feeling worth pressures, he mentioned.
Beef costs have soared as cattle provide touched its lowest point in 2025 because the early Fifties. The annual inflation fee for raw beef roasts was about 21% in November, based on the CPI report.
Espresso costs are additionally up about 19% from a yr in the past, on the back of extreme weather in main coffee-producing nations and Trump administration tariffs levied on Brazil, for instance.
Banana costs are additionally up about 7% over the previous yr.
“Meals is a class that most individuals really feel each day,” Porcelli mentioned. “Loads of that has to do with tariffs.”
Nevertheless, President Donald Trump final month exempted certain agricultural imports like beef, espresso, cocoa and bananas from tariffs amid political blowback over affordability. It is unclear whether that will deliver relief from high grocery prices any time quickly.
