Prices Rise Again Slightly in November. Will Grinchy Inflation Steal the Gift of Lower

Inflation is being a bit of a humbug, refusing to let us all enjoy a little relief from higher prices this holiday season.

At least, that seems to be the case, given the latest Consumer Price Index report, released today by the Bureau of Labor Statistics. The report showed that inflation rose by 2.7% annually in November. The rise aligned with most experts’ expectations, but it marked the second month in a row of inflation reheating. 

Housing retained its title as the biggest contributor to rising prices, with the shelter index up 0.3% month over month. Housing accounted for nearly 40% of the monthly increase, according to the BLS report. 

This comes after last week’s BLS’s jobs report which showed strong job growth, with 227,000 positions added last month. Although unemployment inched up to 4.2%, the data aligned with expectations and is still considered low.

But rising inflation and a strong job market doesn’t bode well for potential interest rate cuts. The Federal Reserve began raising interest rates in 2022 to curb soaring inflation. A combination of cooling inflation numbers and rising unemployment prompted the central bank to cut the federal funds rates twice this fall.

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With inflation coming in as expected, the markets are still in favor of a 0.25% rate cut at next week’s Fed meeting. However, it’s possible the Fed could decide to hold rates steady with inflation inching up and the job market remaining strong. 

“The economy is not sending any signals that we need to be in a hurry to lower rates,” Fed Chair Jerome Powell said during a speech last month, the day after a CPI report showed that inflation rose 2.6% annually in October.

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Interest rates can affect many aspects of your financial life, including how much you pay to borrow money and how much you earn when saving money. If the Fed does cut interest rates next week, now might be a good time to lock in a higher interest rate on your savings with one of the top CDs.

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