In November, inflation experienced an unexpected and significant deceleration, marking a potentially favorable development for Americans burdened by the ongoing elevated cost of living. However, analysts were quick to caution Thursday that the Consumer Price Index slowing to 2.7% from 3% in September was likely the result of shutdown-related distortions of economic data. “It is challenging to draw significant conclusions from the November inflation data. The shutdown evidently exerted a significant influence on data collection,” Heather Long noted Thursday, adding that inflation had not meaningfully improved between September and November. The November CPI report represents the latest delayed economic release following the 43-day federal funding lapse, and like others, it contains numerous caveats tied to the historically prolonged shutdown.
The October inflation figure was not calculated because the shutdown prevented agencies from analyzing data, while November collection began later than scheduled. The Consumer Price Index, which tracks average price changes across a broad basket of goods and services, has taken on added importance amid high tariffs, labor market uncertainty, and persistent household cost pressures. Yet Thursday’s release raised more questions than it answered. “I don’t take it at face value,” said Stephanie Roth, while other economists advised taking the report “with the entire salt shaker.” Much of October’s pricing data was unavailable because two-thirds of CPI prices are normally collected in person, a process disrupted by furloughs.
BLS officials acknowledged these issues, noting that November data collection began on November 14 and that extra hours were authorized to compensate. Even so, the absence of October data meant monthly inflation changes could not be calculated for most CPI categories. Joe Brusuelas of RSM US described the report as flawed, pointing out that rent and owners’ equivalent rent showed near-zero changes, a result he said “does not withstand scrutiny.” Over the two-month period from September to November, prices rose just 0.2%, averaging 0.1% per month, compared with a 0.3% increase in September alone. Analysts had expected a 0.3% monthly rise for November, which would have kept annual inflation at 3%.
The report also showed moderation in core inflation. Excluding food and energy, prices rose 0.2% from September to November, averaging 0.1% monthly, while the annual core rate slowed sharply from 3% to 2.6%, the lowest since March 2021. The White House welcomed the report, with press secretary Karoline Leavitt stating that inflation is falling and wages are rising. Wells Fargo economists, however, cautioned that CPI data are not revised and will likely remain noisy for another month or two, warning that a rebound in prices in the December CPI report, due January 13, is a distinct possibility.