The annual inflation rate increases to 2.7% in November, in line with expectations.

In November, consumer prices increased at a quicker annual rate, indicating that inflation continues to be a concern for both households and policymakers.

The Bureau of Labor Statistics reported on Wednesday that the consumer price index's 12-month inflation rate was 2.7%, up 0.3% from the previous month. This annual rate was 0.1 percentage point higher than the October rate.

The annual core CPI remained at 3.3%, while the monthly reading was 0.3%. Despite a slight change in the 12-month core reading, it remained the same as the previous month.

All of the numbers were in line with the Dow Jones consensus estimates.

The Federal Reserve officials are considering their next move at their policy meeting next week, with markets anticipating a quarter percentage point reduction in the benchmark short-term borrowing rate. However, it is expected that they will not make any further cuts in January as they assess the impact of the previous cuts on the economy.

The CME Group's FedWatch measure indicates that traders have raised the odds of a cut above 96%, further solidifying the outlook for a cut.

Although inflation has decreased from its 40-year high in mid-2022, it is still above the Fed's 2% annual target. Some policymakers have expressed frustration with inflation's persistence and suggested that the rate cut pace may need to slow if more progress is not made.

If the Fed cuts the federal funds rate next week, it will have reduced the rate by a full percentage point since September.

The increase in CPI in November was mainly due to the rise in shelter costs, which increased by 0.3%. Despite predictions from Fed officials and economists that housing-related inflation will decrease as new rental leases are negotiated, the item has continued to increase each month.

In November, the BLS estimated that the shelter index, which accounts for about one-third of the CPI calculation, contributed to about 40% of the total increase in the CPI.

The recent trend of decreasing used and new vehicle prices has been reversed, with used vehicle prices rising 2% monthly and new vehicle prices increasing 0.6%.

Monthly, food costs rose 0.4%, while yearly, they increased by 2.4%. On the other hand, the energy index saw a 0.2% monthly increase but a 3.2% annual decrease.

Although the CPI increased, average hourly earnings for workers remained unchanged when adjusted for inflation, but rose 1.3% from the previous year, according to the BLS.

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