Connect with us

Hi, what are you looking for?

Economy

US consumer prices post largest gain in seven months in November

WASHINGTON (Reuters) – U.S. consumer prices increased by the most in seven months in November, but that is unlikely to discourage the Federal Reserve from cutting interest rates for a third time next week against the backdrop of a cooling labor market.

The consumer price index rose 0.3% last month, the largest gain since April after advancing 0.2% for four straight months, the Labor Department’s Bureau of Labor Statistics said on Wednesday. In the 12 months through November, the CPI climbed 2.7% after increasing 2.6% in October.

Economists polled by Reuters had forecast the CPI rising 0.3% and advancing 2.7% year-on-year.

The annual increase in inflation has slowed considerably from a peak of 9.1% in June 2022. Nonetheless, progress in lowering inflation down to the U.S. central bank’s 2% target has virtually stalled in recent months.

The Fed is, however, now more focused on the labor market. Though job growth accelerated in November after being severely restricted by strikes and hurricanes in October, the unemployment rate ticked up to 4.2% after holding at 4.1% for two consecutive months.

Early on Wednesday, financial markets saw a roughly 86% probability of a 25 basis points rate cut at the Fed’s Dec. 17-18 policy meeting, according to CME Group’s (NASDAQ:CME) FedWatch Tool.

Fewer rate cuts are, however, expected next year than had been anticipated a few months ago.

Though slower inflation is forecast next year amid a moderation in rents and rising labor market slack, that could be offset by higher prices from tariffs and mass deportations that have been promised by President-elect Donald Trump.

“From a fundamental standpoint, we do not see material upside risk to inflation,” said Stephen Juneau, an economist at Bank of America Securities. “That said, progress on inflation should stall next year given our expected changes to tariffs, fiscal and immigration policies.”

Excluding the volatile food and energy components, the CPI increased 0.3% in November, rising by the same margin for the fourth consecutive month.

In the 12 months through November, the so-called core CPI gained 3.3%. That followed a similar advance in October.

The Fed kicked off its monetary policy easing cycle in September. Its benchmark overnight interest rate is now in the 4.50%-4.75% range, having been hiked by 5.25 percentage points between March 2022 and July 2023 to tame inflation.

This post appeared first on investing.com

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.






    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Editor's Pick

    Former president Donald Trump and his allies have filed hundreds of lawsuits, with more to come, seeking to tighten voting rules or disqualify voters....

    Economy

    LONDON (Reuters) – Bank of England interest rate-setter Megan Greene said she still believed the central bank should take a cautious approach to cutting...

    Editor's Pick

    Sister Stephanie Schmidt had a hunch about what her fellow nuns would discuss over dinner at their Erie, Pennsylvania, monastery on Wednesday night. The...

    Latest News

    Warner Bros. Discovery said Thursday its streaming platform Max added 7.2 million global subscribers in the third quarter. It marked the biggest quarterly growth for...

    Disclaimer: beneficialinvestmentnow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 beneficialinvestmentnow.com