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Charly Triballeau \/ AFP via Getty Images<\/p>\n
Inflation dropped to 2.7% in November, according to the CPI report released Thursday. <\/p>\n
Inflation decelerated significantly between September and November, with annual “core” inflation falling to its lowest since 2021.<\/p>\n
Housing inflation slowed dramatically, and prices for clothing and hotel rooms fell, pushing down overall inflation.<\/p>\n
Economists were skeptical of the data since the Bureau of Labor Statistics’ price survey was disrupted by the government shutdown in October and November.<\/p>\n
Inflation fell to its lowest in years in November, according to one important measure.<\/p>\n
Consumer prices rose 2.7% over the 12 months through November, the Bureau of Labor Statistics said Thursday. That was down from a 3% annual increase in September and lower than the 3.1% increase forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. “Core” inflation, which excludes volatile prices for food and energy, rose 2.6% over the year, down from a 3% annual increase in September and hitting its lowest since 2021.<\/p>\n
The reduction in core inflation was especially notable because economists consider core inflation measures to be a more accurate indicator of price trends. Food and gas prices can fluctuate for reasons unrelated to broader inflation trends.<\/p>\n
If it’s not reversed in the coming months, the sudden decline of inflation in November could mark a turning point in the trajectory of the economy, signaling the uptick of inflation caused by tariffs is fading.<\/p>\n
Inflation decelerated because of falling prices for hotel rooms, recreation, and clothing, and a relatively small increase of 0.2% in shelter prices between September and November.<\/p>\n
“At face value, the signal is positive and suggests we may be past the peak in inflation,” Oren Klachkin, financial markets economist at Nationwide, wrote in a commentary. “However, the latest data demands more nuance than usual, given sampling and data collection issues caused by the government shutdown.”<\/p>\n
Indeed, Thursday’s report had been delayed by just over a week because of the government shutdown in October and November, and the bureau did not publish a report for October’s prices.<\/p>\n
Potential distortions in the data due to the shutdown caused some economists to take Thursday’s report with a grain of salt. The bureau started collecting prices in late November, when holiday sales were underway, for instance.<\/p>\n
“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,” Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management, wrote in a commentary.<\/p>\n
Grocery prices rose 1.7% over the year in November, the lowest annual inflation since February, although the figure provoked some skepticism from economists.<\/p>\n
\u201cIt\u2019s hard to read too much into the November inflation data,” Heather Long, chief economist at Navy Federal Credit Union, wrote in a commentary. “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.\u201d<\/p>\n
Update, Dec. 18, 2025: This article has been updated with more information from the CPI report and commentary from economists.<\/p>\n