December 11, 2024
In-line core inflation clears the way for a rate cut at next week’s [Federal Open Market Committee] meeting.
Co-chief investment officer at Goldman Sachs Asset Management, Whitney Watson, regarding the November Consumer Price Index that largely reflected expectations with a slight increase in inflation.
Why It Matters: The Consumer Price Index (CPI) measures a mixed basket of costs of goods and services in the U.S. and is used as an important gauge of inflation (high inflation = your dollar buys you less). Today’s reading shows slightly higher inflation than last month (as October marked a reversed trend in which inflation rose for the first time in seven months); however, economists still feel confident that the numbers further solidify the Federal Reserve’s plan to cut interest rates at their next meeting later this month.
The Numbers: CPI increased 0.3% since last month and 2.7% since November of last year. While the pace of inflation has decreased from its 2022 peak, the annual rate continues to be above the federal government’s 2% target. Some items continue to increase in price more so than others, such as eggs, which rose 8.2% from October to November.
Core inflation (“core CPI”) – seen as a better data point as the measure strips out volatile energy and food prices – shows that prices increased 3.3% annually and .3% over last month. Areas that have seen increases include shelter and used and new cars, as well as motor vehicle insurance.
Read More: Annual inflation rate accelerates to 2.7% in November, as expected (CNBC)
READ the actual CPI report (U.S. Bureau of Labor Statistics)
by Emily Hooker, based in Texas
