Inflation Report Delivers Welcome News

Prices rose just 0.1% in November, 7.1% from a year ago
By Newser Editors and Wire Services
Posted Dec 13, 2022 7:51 AM CST
Inflation Eases More Than Expected, Boosting the Dow
People shop for shoes in a Nike store in New York.   (AP Photo/Julia Nikhinson, File)

Inflation in the United States slowed again last month, the latest sign that price increases are gradually cooling. Consumer prices rose 7.1% in November from a year ago, better than expectations of 7.3%, the government said Tuesday. That was down from 7.7% in October and a recent peak of 9.1% in June, per the AP. It was also the fifth straight slowdown. On a month-to-month basis, the consumer price index rose just 0.1% in November, down from 0.4% in October and better than expectations of 0.3%. Inflation is now at its slowest pace since the end of 2021, per the Wall Street Journal. Investors were happy: Dow futures were up more than 800 points in the wake of the report, per CNBC.

Even with this further easing of inflation, however, the Federal Reserve plans to keep raising interest rates. On Wednesday, the Fed is set to boost its benchmark rate for a seventh time this year, a move that will further raise borrowing costs for consumers and businesses. Economists have warned that in continuing to tighten credit to fight inflation, the Fed is likely to cause a recession next year. Tuesday’s government report showed that inflation in November was slowed by less expensive gasoline, electricity, and used cars, among other items.

Several trends have started to reduce price pressures, though they won’t likely be enough to bring overall inflation back down to levels that Americans were used to anytime soon. The national average for a gallon of regular gas has sunk from $5 a gallon in June to $3.26 as of Monday. Many supply chains have also unsnarled, helping reduce the costs of imported goods and parts. Prices for lumber, copper, wheat, and other commodities have fallen steadily, which tends to lead to lower construction and food costs.

(More inflation stories.)

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