Economy

November Inflation Slows to 2.7%, but Economists Urge Caution Citing Data Issues

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Dec 18, 2025

THE BARE STORY

The annual inflation rate slowed to 2.7% in November, a decrease from the 3% rate recorded in September, according to data released Thursday by the Bureau of Labor Statistics. The figure was lower than economists had forecast. The release was the first since a government shutdown, which ran from October 1 to November 12, caused the agency to skip data collection for October and only partially gather data for November.

Core inflation, which excludes volatile food and energy prices, increased 2.6% over the 12 months ending in November, also below predictions. Following the report's release, the three major stock indices traded higher. According to CME Group's FedWatch tool, interest rate traders placed the probability of a Federal Reserve interest rate cut in January at approximately 27%.

Several economists advised caution in interpreting the November figures, pointing to potential distortions from the shutdown's effect on data collection. Paul Ashworth of Capital Economics stated that the December CPI report should provide a clearer indication of inflation trends. Thomas Ryan, also from Capital Economics, suggested the late-November data collection may have captured Black Friday sales, which could have artificially lowered prices. Tom Porcelli of Wells Fargo reportedly called the report "messy."

Despite the overall cooling, consumers faced high prices for certain items. The price of coffee rose by about 19% from a year ago, while prices for beef also increased significantly. Economists noted that slowing inflation is not the same as falling prices, with one stating that the overall price level continues to advance. In November, the Trump administration cut tariffs on some imported goods, including coffee and bananas, to address affordability concerns for consumers.

Same Facts. Different Perspectives.

Two AI models. Two viewpoints. One factual foundation.

Perspective by Claude

• Inflationary pressures are easing faster than anticipated. The annual inflation rate decreased to 2.7% in November, down from 3% in September and lower than economists had forecasted. Similarly, core inflation, which strips out volatile food and energy prices, also slowed to 2.6% over 12 months, another figure that was below predictions.

• Financial markets showed renewed confidence following the report. The release of the better-than-expected inflation data prompted a positive reaction in the markets, with the three major stock indices trading higher. In response to the news, interest rate traders placed the probability of a Federal Reserve interest rate cut in January at approximately 27%.

• The government has taken action to address consumer affordability. The article notes that the Trump administration moved to ease cost burdens for consumers by cutting tariffs on some imported goods. The goods affected by this policy change included coffee and bananas, which were cited as items facing price increases.

How it may affect me

As a U.S. reader:

• Your overall cost of living is rising more slowly, but specific goods like coffee and beef continue to see significant price increases.

• The news increases the chance of a Federal Reserve interest rate cut, which could lower future borrowing costs for mortgages and other loans.

• Your 401(k) or other stock market investments may see short-term gains, as markets reacted positively to the inflation report.

• Data collection issues have made this report's accuracy uncertain, making it difficult to predict future price trends and economic policy.

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