In November 2024, the U.S. Consumer Price Index (CPI) rose by 0.3% from the previous month, aligning with economists’ expectations. This increase brings the annual inflation rate to 2.7%, up from October’s 2.6%. Core inflation, which excludes volatile food and energy prices, remained steady with a 0.3% monthly rise and a 3.3% year-over-year increase.
The uptick in inflation is attributed to higher costs in sectors such as food, used vehicles, and medical care. Notably, grocery prices increased by 0.5%, with significant spikes in beef (3.1%) and eggs (8.2%), driven by factors like drought conditions affecting cattle numbers and a bird flu outbreak impacting egg supply. Additionally, utility gas services saw a 1% rise.
Despite these increases, the Federal Reserve is expected to proceed with a quarter-point interest rate cut in its upcoming meeting, as the current inflation figures align with market forecasts. The central bank aims to balance controlling inflation with supporting economic growth, especially considering the cooling labor market and persistent inflation pressures.
Financial markets have reacted positively to the CPI report. The Nasdaq Composite, for instance, gained over 1% following the data release. Treasury yields also dropped, reinforcing expectations of a December rate cut by the Federal Reserve.
While inflation remains below the peak levels seen in 2022, consumers continue to face challenges with rising prices for essentials. The Federal Reserve’s upcoming decisions will be crucial in navigating the delicate balance between fostering economic growth and maintaining price stability.