A carton of large white eggs at Save Mart in Fresno, Callifornia, costs $6.49 for one dozen on Monday, Aug. 19, 2024.
Fernanda Galan | Fresno Bee | Tribune News Service | Getty Images
Consumer prices rose at a faster annual pace in November, a reminder that inflation remains an issue both for households and policymakers.
The consumer price index showed a 12-month inflation rate of 2.7% after increasing 0.3% on the month, the Bureau of Labor Statistics reported Wednesday. The annual rate was 0.1 percentage point higher than October.
Excluding food and energy costs, core CPI was at 3.3% on an annual basis and 0.3% monthly. The 12-month core reading was unchanged from a month ago.
All of the numbers were in line with the Dow Jones consensus estimates.
The readings come with Federal Reserve officials mulling over what to do at their policy meeting next week, Markets strongly expect the Fed to lower its benchmark short-term borrowing rate by a quarter percentage point when the meeting wraps up Dec. 18, but then skip January as they measure the impact successive cuts have had on the economy.
While inflation is well off the 40-year high it saw in mid-2022, it remains above the Fed’s 2% annual target. Some policymakers in recent days have expressed frustration with inflation’s resilience and have indicated that the pace of rate cuts may need to slow if more progress isn’t made.
If the Fed follows through with a cut next week, it will have taken a full percentage point off the federal funds rate since September.
Much of the November increase in CPI came from shelter costs, which rose 0.3% and have been one of the most stubborn components of inflation. Fed officials and many economists expect housing-related inflation to ease as new rental leases are negotiated, but the item has continued to increase each month.
The BLS estimated that the shelter item, which has about a one-third weighting in the CPI calculation, accounted for about 40% of the total increase in November. The shelter index rose 4.7% on a 12-month basis in November.
Used vehicle prices rose 2% monthly while new vehicle prices increased 0.6%, reversing the recent trend that has seen those items come down.
Elsewhere, 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.
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