US says price increases eased last month but data may be distorted and
Americans aren't feeling it
[December 19, 2025] By
PAUL WISEMAN and ANNE D'INNOCENZIO
WASHINGTON (AP) — At a time when Americans are frustrated and angry over
the high cost of living, the government released a report Thursday
showing that inflation had cooled unexpectedly in November.
But economists quickly warned that that last month's numbers were
suspect because they’d been delayed and likely distorted by the 43-day
federal shutdown. And most Americans have not felt any let up in the
high prices they are paying for food, insurance, utilities and other
basic necessities.
The Labor Department reported Thursday that its consumer price index
rose 2.7% in November from a year earlier. Yet, year-over-year inflation
remains well above the Federal Reserve's 2% target. Americans, dismayed
by high prices, handed big victories to Democrats in local and state
elections last month.
The inflation report was delayed eight days by the shutdown, which also
prevented the Labor Department from compiling overall numbers for
consumer prices and core inflation in October and disrupted the usual
data-collecting process. Thursday’s report gave investors, businesses
and policymakers their first look at CPI since the September numbers
were released on Oct. 24.
Consumer prices had risen 3% in September from a year earlier, and
forecasters had expected the November CPI to match that year-over-year
increase.
“It’s likely a bit distorted,’’ said Diane Swonk, chief economist at the
tax and consulting firm KPMG. “The good news is that it’s cooling. We’ll
take a win when we can get it.’’
Still, Swonk added: “The data is truncated, and we just don’t know how
much of it to trust.’’ By disrupting the economy – especially government
contracting – the shutdown may have contributed to a cooling in prices,
she said.
Kay Haigh, global co-head of fixed income and liquidity solutions at
Goldman Sachs Asset Management, warned that the November numbers were
“noisy ... The canceling of the October report makes month-on-month
comparisons impossible, for example, while the truncated
information-gathering process given the shutdown could have caused
systematic biases in the data.''
Many economists don't expect to get a reliable read on inflation until
next month when the Labor Department releases CPI numbers for December.
Energy prices, driven up by sharply higher fuel oil prices, rose 4.2% in
November. Excluding volatile food and energy prices, so-called core
inflation rose 2.6%, compared with a 3% year-over-year gain in September
and the lowest since March 2021.
U.S. inflation remains stubbornly high, partly because of President
Donald Trump’s decision to impose double-digit taxes on imports from
almost every country on earth along with targeted tariffs on specific
products like steel, aluminum and autos.
The president’s tariffs have so far proved less inflationary than
economists feared. But they do put upward pressure on prices and
complicate matters at the Fed, which is trying to decide whether to keep
cutting its benchmark interest rate to support a sputtering job market
or whether to hold off until inflationary pressures ease. The central
bank last week decided to reduce the rate for the third time this year,
but Fed officials signaled that they expect just one cut in 2026.
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People shop at the Somerset Collection mall, Wednesday, Dec. 10,
2025, in Troy, Mich. (AP Photo/Ryan Sun)
 "The Fed will instead focus on the
December CPI released in mid-January, just two weeks before its next
meeting, as a more accurate bellwether for inflation,'' said Haigh
at Goldman Sachs.
Trump delivered a politically charged speech Wednesday that aired
live during prime time on network television, seeking to pin the
blame for economic challenges on Democrats.
The speech was a rehash of his recent messaging that has so far been
unable to calm public anxiety about the rising cost of groceries,
housing, utilities and other basic goods.
As the holiday season approaches, Americans are dipping into
savings, scouring for bargains and feeling like the overall economy
is sputtering, a new AP-NORC poll finds.
The vast majority of U.S. adults say they’ve noticed higher than
usual prices for groceries, electricity and holiday gifts in recent
months, according to the survey from The Associated Press-NORC
Center for Public Affairs Research.
Roughly half of Americans say it’s harder than usual to afford the
things they want to give as holiday gifts, and similar numbers are
delaying big purchases or cutting back on nonessential purchases
more than they would normally.
Trump has promised an economic boom, yet inflation has stayed
elevated and the job market has weakened in the wake of his import
taxes.
Trump’s tariffs are taking a toll on companies like Wolverine
Worldwide, which makes footwear brands like Merrell and Saucony.
Facing extra tariff costs of $10 million this year and $55 million
in 2026, the Rockford, Michigan, company had to increase prices
between 5% and 8% on some products in June, and will have to raise
prices again next year. It’s put a freeze on hiring and capital
investments.
The company is getting squeezed even as it diversifies its sourcing
network away from China, which now makes less than 10% of its
products. During Trump’s first term, Wolverine shifted production to
Vietnam. Now it’s moving to Bangladesh, Cambodia and Indonesia.
The problem isn’t just the cost of the tariffs. It’s the uncertainty
caused by the unpredictable way that Trump rolls them out. “From a
business leader’s perspective, it’s one thing if there’s bad news,”
said Wolverine CEO Christopher Hufnagel. “Just tell me what the bad
news is, and I’ll go work to try to solve for it. It’s the
uncertainty of how it actually plays out that causes so much trouble
because then we’re modeling all these different scenarios and it
seems like things can change in the middle of the night.”
____
D'Innocenzio contributed to this story from New York.
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