The annual inflation rate fell in November, according to data released Thursday by the Bureau of Labor Statistics (BLS), defying economists’ expectations.
The consumer price index (CPI) rose 2.7 percent over the 12-month span ending in November, down from 3 percent in September. Economists expected the annual inflation rate to rise to 3.1 percent and core inflation to rise to 3 percent, according to consensus estimates.
The BLS was unable to collect data on October prices due to the federal government shutdown, which lasted Oct. 1 to Nov. 12. The shutdown also delayed the collection of November price data, which some economists warned could make the latest CPI report less precise than normal.
Without October price data, the BLS was also unable to calculate most month-to-month price changes from September through November.
“It’s hard to read too much into the November inflation data. The shutdown clearly had a big impact on data collection. Inflation did not suddenly improve a lot between September and November. Anyone who has been to the grocery store or paid a utility bill knows this,” Heather Long, chief economist at Navy Federal Credit Union, wrote in a Thursday analysis.
The new inflation figures come a day after President Trump attempted to take credit for repairing the economy in a Wednesday night address to the nation.
While Trump claimed he had fixed an economic disaster he inherited from former President Biden, the unemployment rate is higher now than when his second term began in January, and annual inflation has lingered well above the Federal Reserve’s target of 2 percent.
Unemployment rose from 4 percent in January to 4.6 percent in November, according to data released Tuesday by the BLS. The annual inflation rate was 3 percent in January, fell as low as 2.3 percent in April, and rose back toward its January level after Trump imposed billions of dollars in tariffs over the summer.
The unexpectedly soft inflation report could raise the chances of another Federal Reserve rate cut in January, which would mark the fourth consecutive Fed meeting to end in lower rates.
The central bank cut rates earlier this month despite concerns among some members about the high level of inflation.
“This report vindicated the Federal Reserve’s dovish stance at its most recent meeting and could raise the likelihood of another rate cut in January,” Stephen Kates, financial analyst at Bankrate, wrote in an analysis.
“There will be plenty of economic data to evaluate between now and then, but another cooler than expected inflation reading would suggest that the Federal Reserve may already be ahead of its inflation targets for 2026.”