USA: Inflation “hit the gas” in November

The consumer price index on USA grew at a faster annual rate in November, which reminds us that the inflation remains an issue for both households and policy makers.

The consumer price index showed a 12-month inflation rate of 2.7 percent after rising 0.3 percent in the month, the U.S. Bureau of Labor Statistics said on Wednesday.

Excluding food and energy costs, the core index stood at 3.3% year-on-year and 0.3% month-on-month.
All numbers were in line with Dow Jones consensus estimates.

The readings come as Federal Reserve (Fed) officials ponder what to do at their policy meeting next week. Markets are keenly expecting the Fed to cut its benchmark short-term lending rate by a quarter of a percentage point when the meeting ends on December 18, but will then skip January as it measures the impact successive cuts have had on the economy.

While inflation is well off the 40-year high it hit in mid-2022, it remains above the Fed’s annual target of 2%. Some policymakers in recent days have expressed dismay at inflation’s resilience and said the pace of rate cuts may have to slow if more progress is not made.

If the Fed follows through with a cut next week, it will have removed a full percentage point from the federal funds rate since September.