The U.S. consumer price index (CPI) rose by 0.3% in November, marking the largest increase since April. This uptick follows four consecutive months of 0.2% gains. The main drivers behind the inflation were higher food prices and more expensive hotel and motel rooms.
Rents, however, showed a different trend, rising at the slowest rate since July 2021. Food prices climbed 0.4% in November, up from 0.2% in October, with grocery store prices surging 0.5%. Egg prices saw a significant jump of 8.2%, partly due to an avian flu outbreak. On the other hand, cereal and bakery prices dropped by 1.1%, marking the largest decrease since 1989.
Despite the recent inflation spike, many analysts don’t expect it to prevent the Federal Reserve from cutting interest rates for the third consecutive time next week. This expectation is supported by a cooling labor market and slower rental price increases. “The data have given the Fed the ‘all clear’ for next week,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Today’s inflation data keep a January cut in active discussion.”
Overall, inflation has slowed significantly from its peak of 9.1% in June 2022, with falling oil and fuel prices helping ease the pressure.
In a positive development for consumers, the national average price of gasoline has dropped below $3 per gallon for the first time in over three and a half years. According to GasBuddy, which tracks prices from more than 12 million reports across 150,000 gas stations, the average price was $2.97 per gallon on Monday—the lowest since 2021.
Patrick De Haan, head of petroleum analysis at GasBuddy, noted that 35 U.S. states now have average gas prices below $3 per gallon, an increase of seven states from the previous month. “It couldn’t come at a better time for motorists with the holidays upon us,” De Haan said. “This is the lowest gasoline affordability since 2015, excluding the COVID period.”
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