Highlights
The November CPI report on the surface shows a decelerating pace of consumer price increases, with all the headline numbers coming in lower than expected. However, the disruption to data collection caused by the prolonged federal government shutdown means there are no monthly inflation numbers for October and November.
Still, this report supports predictions of additional Federal Reserve rate cuts in 2026, although the elevated level of services inflation excluding energy (+3.0 percent) should temper expectations for aggressive monetary policy easing.
The Consumer Price Index in November slowed a bit to +0.2 percent over the past two months, following a 0.3 percent increase in September. The November CPI reading was below expectations for a 0.3 percent rise in the Econoday survey of forecasters.
Over the last 12 months, consumer prices are up 2.7 percent, faster than the 3.0 percent year-over-year rise in September. Expectations in the Econoday survey were for a 3.1 percent increase.
Core CPI, excluding food and energy prices, is up 0.2 percent over the past two months ending in November, the same rate as in September. Consumer prices less food and energy rose 2.6 percent from November 2024, following a 3.0 percent year-over-year rise in September and 3.1 percent expected in the Econoday survey.
After a 0.2 percent rise in September, shelter costs increased at the same rate in November (and are up 3.0 percent year-over-year). Food prices are up just 0.1 percent over the two-month period, after a 0.2 percent bump in September. Grocery prices are up 1.9 percent compared to a year ago, and restaurant prices surged 3.7 percent.
Energy costs rose 1.1 percent over the past two months, following a 1.5 percent jump in September boosted by a 3.0 percent spike in gasoline prices.
Energy prices are up 4.2 percent year-over-year, following a 2.8 percent increase for the 12 months ending October. Food prices increased by 2.6 percent compared to November 2024, following a 3.1 percent rise in September.
Still, this report supports predictions of additional Federal Reserve rate cuts in 2026, although the elevated level of services inflation excluding energy (+3.0 percent) should temper expectations for aggressive monetary policy easing.
The Consumer Price Index in November slowed a bit to +0.2 percent over the past two months, following a 0.3 percent increase in September. The November CPI reading was below expectations for a 0.3 percent rise in the Econoday survey of forecasters.
Over the last 12 months, consumer prices are up 2.7 percent, faster than the 3.0 percent year-over-year rise in September. Expectations in the Econoday survey were for a 3.1 percent increase.
Core CPI, excluding food and energy prices, is up 0.2 percent over the past two months ending in November, the same rate as in September. Consumer prices less food and energy rose 2.6 percent from November 2024, following a 3.0 percent year-over-year rise in September and 3.1 percent expected in the Econoday survey.
After a 0.2 percent rise in September, shelter costs increased at the same rate in November (and are up 3.0 percent year-over-year). Food prices are up just 0.1 percent over the two-month period, after a 0.2 percent bump in September. Grocery prices are up 1.9 percent compared to a year ago, and restaurant prices surged 3.7 percent.
Energy costs rose 1.1 percent over the past two months, following a 1.5 percent jump in September boosted by a 3.0 percent spike in gasoline prices.
Energy prices are up 4.2 percent year-over-year, following a 2.8 percent increase for the 12 months ending October. Food prices increased by 2.6 percent compared to November 2024, following a 3.1 percent rise in September.
Market Consensus Before Announcement
CPI for November expected up 0.3 percent on the month and 0.3 percent for the core from October. On year, the call is up 3.1 percent and up 3.0 percent core.
* BLS will publish the November 2025 CPI news release on December 18, 2025. This news release and database update will not include 1-month percent changes for November 2025 where the October 2025 data are missing.
* BLS will publish the November 2025 CPI news release on December 18, 2025. This news release and database update will not include 1-month percent changes for November 2025 where the October 2025 data are missing.
Definition
The CPI is a measure of the change in the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation for the consumer. Annual inflation is also closely watched.
The consumer price index is available nationally by expenditure category and by commodity and service group for all urban consumers (CPI-U) and wage earners (CPI-W). All urban consumers are a more inclusive group. The CPI-U is the more widely quoted of the two, although cost-of-living contracts for unions and Social Security benefits are usually tied to the CPI-W, because it has a longer history. Monthly variations between the two are slight.
The CPI is also available by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for many metropolitan areas. The regional and city CPIs are often used in local contracts.
The Bureau of Labor Statistics also produces a chain-weighted index called the Chained CPI. This measures a variable basket of goods and services whereas the regular CPI-U and CPI-W measure a fixed basket of goods and services. The Chained CPI is similar to the personal consumption expenditure price index that is closely monitored by the Federal Reserve Board.
The consumer price index is available nationally by expenditure category and by commodity and service group for all urban consumers (CPI-U) and wage earners (CPI-W). All urban consumers are a more inclusive group. The CPI-U is the more widely quoted of the two, although cost-of-living contracts for unions and Social Security benefits are usually tied to the CPI-W, because it has a longer history. Monthly variations between the two are slight.
The CPI is also available by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for many metropolitan areas. The regional and city CPIs are often used in local contracts.
The Bureau of Labor Statistics also produces a chain-weighted index called the Chained CPI. This measures a variable basket of goods and services whereas the regular CPI-U and CPI-W measure a fixed basket of goods and services. The Chained CPI is similar to the personal consumption expenditure price index that is closely monitored by the Federal Reserve Board.
Description
The consumer price index is the most widely followed monthly indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets- and your investments.
If someone borrows $100 dollars from you today and promises to repay it in one year with interest, how much interest should you charge? The answer depends largely on inflation as you know the $100 will not be able to buy the same amount of goods and services a year from now. The CPI tells us that prices rose 4.2 percent in the U.S. over 2007. To recoup your purchasing power, you would have to charge 4.2 percent interest. You might want to add one or two percentage points to cover default and other risks, but inflation remains the key factor behind the interest rate you charge.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to Treasury bills, notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets- and your investments.
If someone borrows $100 dollars from you today and promises to repay it in one year with interest, how much interest should you charge? The answer depends largely on inflation as you know the $100 will not be able to buy the same amount of goods and services a year from now. The CPI tells us that prices rose 4.2 percent in the U.S. over 2007. To recoup your purchasing power, you would have to charge 4.2 percent interest. You might want to add one or two percentage points to cover default and other risks, but inflation remains the key factor behind the interest rate you charge.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to Treasury bills, notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
