Inflation cooled unexpectedly in November, although economists cautioned that gaps in the data make it too early for the White House to declare victory.
The November consumer price index reported prices rose at a 2.7 percent rate from a year earlier, cooler than the most-recent reading from September, according to new data from the Labor Department on Thursday. “Core” inflation, the rate without volatile food and energy costs, increased at an annual rate of 2.6 percent, an improvement from September.
That kind of cooling reflects the best inflation report since President Donald Trump took office. However, unlike prior inflation reports, this one lacked data, especially many of the month-to-month changes in inflation in certain sectors, due to the six-week government shutdown that prevented data collection in October.
Economists said the headline figures were likely skewed lower by quirks in how the report was compiled, with several noting that officials did not begin gathering prices until the second half of November — a period that may have captured Thanksgiving discounts without fully reflecting higher prices earlier in the month, when promotions are typically scarcer.More significantly, a third of the inflation index looks lower than it otherwise would because the government’s data appears to show no increase at all in rent and homeowners’ housing costs for October.
Inflation in those categories did not stop rising, but the zeroed out data appears to be a technical quirk in how the data was collected and reported, according to Omair Sharif, who leads forecasting firm Inflation Insights.
Since housing costs normally rise steadily and make up a large share of the CPI, recording them as flat for a month artificially pulls down the overall inflation number, making inflation look cooler than it likely is in reality, he said.
“I would call this a rather dirty report,” said Dan North, senior economist at Allianz Trade North America. “It’s very hard to come away with any serious conclusions.”
The report landed just hours after Trump addressed the nation in a rare prime-time appearance aimed at rebutting criticism of his handling of the economy, as rising living costs have remained a political vulnerability heading into the latter part of 2025. Trump largely blamed economic problems on his predecessor but said prices were now coming down.
“You saw the inflation numbers,” Trump told reporters Thursday in the Oval Office. “It just came out today. What great timing. Practically no inflation.”
Economists urged caution against reading too much into the report, even ahead of its release. The six-week government shutdown caused the Bureau of Labor Statistics to skip its October consumer price index survey, creating a break in the data that the agency cannot fully repair. Federal Reserve Chair Jerome H. Powell told reporters last week that the data should be viewed with a “skeptical eye,” citing the potential for technical distortions triggered by the shutdown.
“Check back in February when we will have three months of data to get a better informed direction of the trend in inflation and turn-of-the-year price increases,” said Joe Brusuelas, chief economist at RSM.
Thursday’s report showed energy prices rose 4.2 percent over the past year, driven by an 11.3 percent increase in fuel costs and a 6.9 percent rise in electricity prices. Food prices were up 2.6 percent, while prices for medical care services were up 3.3 percent. Gasoline, a bright spot for the administration, was up only 0.9 percent.
Elevated inflation has been a challenge for Trump, who has sought to play down voters’ concerns by calling cost-of-living worries a “hoax,” likening them to what he has described as politically motivated scandals.
At the same time, Republican allies have urged patience, arguing that the White House’s sweeping new tax law and push to roll back regulations will take time to have an effect. But Trump finds himself facing a familiar challenge that weighed on President Joe Biden’s approval ratings even before the 2024 campaign began: Many voters say they don’t like the economy, regardless of headline indicators.
The report comes at a moment of growing uncertainty about the broader economic outlook. Job growth has slowed sharply in recent months, and data released Tuesday showed further weakening, adding to concerns that the labor market is losing momentum even as inflation remains stubbornly high. The U.S. economy shed 41,000 jobs over October and November, and the unemployment rate climbed to 4.6 percent — its highest level since 2021 — a combination that is intensifying concerns about whether the economy is slipping into a more pronounced slowdown.
Despite the administration’s sweeping tariffs, higher costs were slow to show up in consumer prices, blunted at first by delayed implementation and a wave of stockpiling by companies eager to get ahead of the levies. Those buffers have largely been exhausted, however, and by this summer price increases had begun to spread across a broader range of goods — a shift some economists say could make inflation harder to contain.
The unusual inflation report comes as the Federal Reserve is navigating an increasingly narrow path, caught between a labor market that is showing clear signs of strain and inflation that remains uncomfortably high. Fed officials have cut interest rates at three consecutive meetings since September, including last week, signaling that for now they are more focused on cushioning a softening job market than stamping out persistent price pressures.
Even so, policymakers have repeatedly described those decisions as close calls, with some warning that patience carries risks of its own.
In a speech Tuesday, retiring Atlanta Fed President Raphael Bostic cautioned that allowing inflation to run above the central bank’s 2 percent target for too long could erode the Fed’s credibility. “Credibility is a cornerstone of effective monetary policy,” Bostic said, warning that “a half decade — and likely soon to be longer — of missing the inflation target could well imperil the committee’s credibility as a steward of price stability,” he said, referring to the Fed’s Federal Open Market Committee, which sets interest rates.
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