Consumer prices increased moderately in October and November, according to the Federal Reserve’s preferred inflation gauge.
Data released on Thursday from the Personal Consumption Expenditures price index, as the gauge is called, showed a 0.2 percent monthly increase in prices in October and a 0.2 percent increase in November. Compared with the same time the previous year, prices were up 2.7 percent in October and up 2.8 percent in November.
Altogether, the numbers tell a story in which inflation — while far down from its highs after the pandemic — continues to nag households. Goods inflation, for instance, which had been notably cooling since 2022, swung back up after the Trump administration implemented tariffs last spring.
The reading is several months old because of the government shutdown last fall, which prevented key data collection functions. But the numbers will provide the Federal Reserve with more information to consider at its policy meeting next week. Traders expect that Fed officials will decide to not cut interest rate cuts again, for now, as economic growth has surprised to the upside, unemployment remains tame, and inflation has plateaued.
The data also showed that consumer spending, the beating heart of the U.S. economy, is still holding up, even as concerns about affordability for lower-income households persist.
“Affluent” households “continue to power the economy forward,” said Diane Swonk, the chief economist at KPMG. “The concentration of gains in the hands of a few households masked the underlying pain many are expressing in consumer attitude surveys.”
Personal income increased $80 billion overall in November 2025, registering a steady 0.3 percent monthly rate of growth. But inflation-adjusted “real” disposable personal income was down by a tenth of a percentage point in October, before rebounding by a tenth of a percentage point in November — a clear indication that the bite of price pressures is still hitting households.Inflation has been above the Fed’s 2 percent target since 2021. Even though the White House is hoping to provide households with lower mortgage rates, those rates are influenced by inflationary conditions as much as Fed policy. And as long as inflation remains nearer to 3 percent than 2 percent, some Fed officials may be hesitant to lower interest rates. And the parts of the bond market that affect mortgage rates may not budge.
The president is expected in the coming weeks to name a nominee to replace the Fed chair, Jerome H. Powell. Yet most market analysts still expect the Fed’s policy committee to operate rate policy according to prevailing economic conditions, not the president’s whims.
Labor market data shows that while unemployment is historically low, at 4.4 percent as of December, net hiring levels have substantially deteriorated, affecting new graduates and the long-term unemployed alike. Still, new jobless claims, which are measured weekly state by state, have been remarkably low and steady, an indicator that layoffs remain muted.
Talmon Joseph Smith is a Times economics reporter, based in New York.
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