The U.S. inflation rate edged higher in November but remained below forecasts, signaling a potential cooling of price pressures. The personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 2.4% year-over-year, slightly under the projected 2.5%.
Key Highlights:
The core PCE price index (excluding food and energy) increased by only 0.1%, marking the smallest monthly rise since May.
Consumer spending grew robustly in November, driven by strong demand across various goods and services, including new motor vehicles. Economists partially attribute this to vehicle replacements following damage from Hurricanes Helene and Milton.
The Federal Reserve, citing economic resilience and persistent price pressures, has adjusted its outlook, projecting fewer interest rate cuts in 2025 than previously anticipated.
Economists noted that while inflation appears to be cooling, some goods' prices remain stubbornly high, reinforcing the Fed's cautious approach to rate reductions. The combination of slowing inflation and steady consumer demand highlights the economy's resilience but underscores ongoing challenges in achieving long-term price stability.
