U.S. Consumer Price Index (November 2025)

Headline & core inflation unexpectedly cool in November 

The government shutdown impacted the Bureau of Labor Statistics' (BLS) data collection process during the month of October. Accordingly, the BLS is not reporting headline and core CPI inflation figures for that month, but they did report some sub-indices that are based on non-survey data. The BLS also noted that the November collection began on November 14^th and extended through the end of the month. 

• Headline CPI rose 2.7% year-on-year (y/y) in November, well below the consensus forecast of 3.1% and a deceleration from September's 3.0%. 
  • Energy prices firmed – rising 4.2% y/y from 2.9% in September – while food prices cooled to 2.6% y/y. 
• Core inflation registered 2.6% y/y (down from 3.0% y/y in September) and the softest reading since March 2021. November's print also came in well below the consensus forecast of 3.0% y/y. The three-month annualized rate of change slowed to just 1.6%. 
• Price pressures on services inflation cooled sharply, aided by a further easing in primary shelter costs (3.0% from 3.5% in September) and non-housing services (2.6% from 2.3%). 
• Meanwhile, goods prices unexpectedly slowed, with the three-month annualized rate dropping to 1.1% (from 2.9% in September).

Key Implications

• Well, that was a surprise! Disinflationary pressure was evident across the board in November, with both goods and services inflation cooling. That said, we are hesitant to put too much stock in today's figures. The government shutdown delayed the collection of November's data, pushing the collection period into the holiday shopping season where there's traditionally deep discounting. Moreover, much of the decline in services was the result of a sharp slowing in primary shelter costs, suggesting we could see some giveback in the months ahead. 
• Chair Powell already warned that near-term data could suffer from distortions, suggesting Fed officials won't put too much emphasis on one month's data. That said, should inflation show further signs of cooling in the months ahead, it certainly raises the odds that the timing of further rate cuts is pulled forward, particularly if the labor market were to also show further signs of softening. Treasury yields across the curve fell several basis points following the release, with the 2-and-10-year yield dropping to 3.44% and 4.13%, respectively. Fed futures are nearly fully priced for another quarter-point cut by April. 

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