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Consumer prices rose 2.8% in November from a year earlier, the
Commerce Department said Thursday, up from a 2.7% annual pace in
October. Excluding the volatile food and energy categories, core
prices also increased 2.8% in November from a year ago, slightly
higher than October’s 2.7%.
Consumer spending climbed 0.5% in November from the previous
month, the report also showed, a solid increase that hits at an
economy growing at a healthy pace in the final three months of
last year.
The figures point to a mostly strong economy with inflation
still elevated, but down sharply from a four-decade peak in June
2022. Hiring has slowed to a crawl, however, leaving job-seekers
frustrated even as the unemployment rate stays low. Thursday's
figures suggest that the Federal Reserve will be less likely to
reduce its key interest rate when it meets next week, a tact
typically used if it is worried about a stumbling economy.
“Today’s data should reassure the Fed that the economy remains
on a solid footing, despite a cooler labor market,” said James
McCann, an economist at Edward Jones. "Indeed, there looks to be
little urgency to cut rates at next week’s meeting, and the
central bank could stay on hold for longer should growth remain
robust into 2026 and inflation continue to run at above target
rates.”
On a monthly basis prices, were milder: Both overall inflation
and core inflation moved up just 0.2% in November from October.
At that pace, over time inflation would move closer to the
Federal Reserve’s target of 2%. Thursday’s data was delayed by
the six-week government shutdown last fall.
The solid figures on consumer spending follow a separate report
Thursday which showed that the economy expanded at a healthy
4.4% annual rate in the July-September quarter, the fastest
growth in two years. Thursday's data points to continued solid
growth in the final quarter of 2025.
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