CPI Report Shows U.S. Inflation Eased in November - WSJ
S E E D E D C O N T E N T
Consumer prices rose last month at the slowest 12-month pace since December 2021, closing out a year in which inflation hit the highest level in four decades and challenged the Federal Reserve's ability to keep the U.S. economy on track.
The Labor Department on Tuesday said that its consumer-price index climbed 7.1% in November from a year ago, down sharply from 7.7% in October—building on a trend of moderating price increases since June's 9.1% peak.
Core CPI, which excludes volatile energy and food prices, rose 6% in November from a year ago, easing from a 6.3% gain in October. September’s 6.6% increase was the biggest jump since August 1982.
Prices softened significantly on a month-to-month basis. The CPI increased 0.1% in November from the prior month, compared with 0.4% in October. Core CPI rose 0.2% in November, down from 0.3% in October and 0.6% in August and September. The CPI measures what consumers pay for goods and services.
The Fed has raised its benchmark interest rate this year at the fastest pace since the early 1980s to combat inflation. It is expected to announce on Wednesday a 0.5-percentage-point increase, bringing rates to a range between 4.25% and 4.5%, the highest level since December 2007.
Inflation soared in 2021 as the economy recovered from the Covid-19 pandemic. Prices leapt as surging consumer demand—fueled by very low interest rates and government stimulus—collided with limited supply caused by pandemic-related disruptions. Russia’s invasion of Ukraine further inflamed inflation worldwide , pushing up prices for energy and other commodities. That culminated in June’s U.S. CPI reading, the highest since 1982.
Overall inflation has eased since the summer as supply bottlenecks have improved. Gasoline prices fell in November, with the national average price of regular unleaded gasoline at $3.26 a gallon on Monday, down by about 50 cents a gallon from a month earlier, according to OPIS, an energy-data and analytics provider. Prices peaked in mid-June at a record $5.02 a gallon.
Inflation remains high, however, and has spread to more labor-intensive services as wages surged in a tight labor market where demand for workers exceeds the number of unemployed looking for jobs. Low unemployment and wage gains are helping fuel consumer spending , which has remained robust despite rapidly rising prices.
Fed Chair Jerome Powell in a recent speech said price trends for services, not including housing, reflect inflationary pressures in the broader economy and were important when gauging inflation’s future path.
“Because wages make up the largest cost in delivering these services, the labor market holds the key to understanding inflation in this category,” he said.
“The labor market is sort of the last stand where strength there is leading to higher wage growth, and that could continue to pressure inflation,” said Michael Pond, head of global inflation-linked research at Barclays PLC.
Home sales have fallen as mortgage rates increased. An easing of housing costs and the slowing pace of price increases for goods could take some pressure off inflation, said Paul Ashworth, chief U.S. economist at Capital Economics.
“For the next six to 12 months, even without moderation in wage growth, core inflation can come down quite considerably with just the disinflation we’re going to be getting from goods and shelter prices,” he said.
Mike Smith, owner of Griffith Bag Co., an agricultural-packaging company, said the supply challenges that had made his business difficult over the last two years are receding.
Deliveries of polypropylene bags from India, which his company supplies to the agricultural industry, have returned to normal, following delays of nearly six months in 2021.
"An order in July showed up in mid-September. It compressed so amazingly fast,” said Mr. Smith, whose business is in Harrisonburg, Va. Though prices for key commodities are still above prepandemic levels, they have started coming down steadily.
“Now we’re back to a mostly normal production cycle, and everything seems to be readily available,” he said.
High inflation has prompted consumers to adjust. Emma Chao, an art director in Brooklyn, N.Y., said she has scaled back on spending as prices surged for rent, health-insurance premiums, and veterinary care.
She has started buying clothes for her daughter at swaps instead of stores. She scrapped plans to buy a car and instead purchased an electric bike in a Black Friday sale. And she is planning to buy a smaller Christmas tree after a friend told her they were selling for more than $100 in Brooklyn.
“I usually get a 5-foot tree, but this year we’ll just do a 3- or 4-foot tree,” said Ms. Chao, who is 37 years old. “Even then, I haven’t bought one yet because I’m dreading the price tag.”
Five months in a row.
Good news for Joe
Woe to the MAGA! Employment is booming, wages are growing, inflation is waning. It's a go for Joe!
Biden 2024!
Leftist BS is the only thing that is booming.
Brandon & Hunter in prison 2024!
Don't worry, they'll find something else to whine about. Or just plain deny the numbers.
Kroger price for a 5 foot Christmas tree...$89.00!
Gas down to $2.79, but groceries still historically high.
Large eggs are $4.29 a dozen....and thanks to the Dems only cage free eggs are legal in Colorado after January 1st. That should see the price go up some more, and once again, only the poor and disadvantaged will be hurt the most.
Wow, wish it was that low around here. Still $3.49 to $3.55 a gallon for reg.
“Kroger price for a 5 foot Christmas tree...$89.00! “
Paid $8 for a permit to cut your own tree right here in Colorado. Spent a lovely day on Sunday, hitting the hills, snowshoeing in, picking a somewhat misshapen and yet perfect tree, drinking hot cocoa…starting the holiday season less concerned about the ever fluctuating prices and focusing on great times spent and memories made with friends and family. Happy holidays.
So you added to global warming but cutting down a tree that was filtering CO2 from the atmosphere.
did you go up on the mesa?
oh plastic tree,
oh plastic tree,
with chemical pine tree fragrance...
That does make great memories.
“So you added to global warming but cutting down a tree that was filtering CO2 from the atmosphere.”
No, George. I bought a pass to a regulated National Forest…a healthy environment that allows limited cutting of trees, limited logging licenses, limited access to motorized vehicles.
Better to get a clue than to simply spew.
“did you go up on the mesa?”
The divide road running through the GMUG forests…magical does not begin to do it justice.
So the tree wasn't filtering CO2 from the atmosphere? And you didn't simply take the cheaper route?
This reads you took cash over the environment.
“Kroger price for a 5 foot Christmas tree...$89.00! “
Paid $8
“This reads you took cash over the environment.”
No george, no.
It’s rather obvious where you want to (in total ignorance) divert this discussion…not interested.
Enjoy your fake tree and equally fake concerns.
If it wasn’t for the insanity of the last year, 7.1% inflation would be the highest in 40 years. 2% is healthy.
According to many on the left Trump was responsible for the inflation in 2021; even though he was well out of office when it began.
Democrats think everything is a victory for them.
Gas prices are down from Brandon's high; but still above where they were when he took office- win!
Inflation still insanely high; but down from the record high Brandon had it at- win!
Wide open borders and record high illegal immigrants entering this country- there is no problem, they are all asylum seekers- win!
Record crime thanks to their Soros backed racially soft DA's and defund the police- social justice at work- win!
Brandon and Hunter guilty of money laundering; extortion; and many other pay for play crimes- But Trruuummmmppppp!!!!!!!- win!
Russia could nuke us tomorrow and Democrats would declare it a victory of some sort.
My personal CPI was 6.7%, so I am okay with "under performing". I don't use much gasoline, but I do eat food for some reason. The upstream for food prices, does not look favorable, but only Mother Nature can remedy that, imho. For me December is running about 6.4% above last year.