US Inflation Slowed Again in November

US inflation slowed for a second month in November, as consumer prices increased 7.1% from a year earlier, down from the 7.7% rise seen in October, and the 40-year high of 9.1% increase in June, according to the Labor Dept.’s Consumer Price Index.

US Inflation Slowed Again in November
Image credit: PBS NewsHour

Facts

  • US inflation slowed for a second month in November, as consumer prices increased 7.1% from a year earlier, down from the 7.7% rise seen in October, and the 40-year high of 9.1% increase in June, according to the Labor Dept.’s Consumer Price Index.
  • Despite higher food and rent costs countering declining gas prices to keep inflation relatively high, last month’s increase was at the slowest pace since December 2021 and beat an expected increase of 7.3%.
  • Part of the lower-than-expected increase has been attributed to the clearing of many supply chains, which has lowered the cost of imported goods and parts, such as lumber, copper, wheat, and other commodities.
  • The Federal Reserve (Fed) still plans to continue raising rates, with an expected 0.5% increase scheduled for Wednesday — a decline from the previous four 0.75% hikes.
  • Fed Chair Jerome Powell said he’s tracking prices of goods (excluding volatile food and energy costs), housing, and services, in order to understand what direction inflation will head in the near future.
  • Stock markets reacted positively to the news as it signals an easing in the Fed's rate hikes. However, the Fed’s goal is to get inflation to a level of 2% annually, which some economists forecast could take several years.

Sources: USA Today, CBS, and Independent.

Narratives

  • Democratic narrative, as provided by Newsweek. This is a direct result of Pres. Biden’s efforts and much-needed good news ahead of the holidays. The Inflation Reduction Act of 2022, coupled with the Fed's monetary tightening policy, has begun to cool things off. The US economy is back on track.
  • Republican narrative, as provided by Red State. The US economy is far from being back on track. While the overall rate of inflation may have decreased, the price of key products and services – such as milk, baby food, gas, and airfares – is still up double-digit percent from two years ago. When the numbers improve only compared to a period that also saw record-high prices, it's not much of an accomplishment.