Annual inflation accelerates to 2.7% in November, as expected

Consumer prices rose at a faster annual rate in November, a reminder that inflation remains a concern for both households and policymakers.

The consumer price index showed a 12-month inflation rate of 2.7%, after rising 0.3% month over month, the Bureau of Labor Statistics reported Wednesday.

Excluding food and energy costs, the core CPI was 3.3% on an annual basis and 0.3% on a monthly basis.

All numbers were in line with Dow Jones consensus estimates.

The readings come as Federal Reserve officials consider what to do at their policy meeting next week. Markets are heavily expecting the Fed to cut its benchmark short-term lending rate by a quarter of a percentage point when the meeting ends Dec. 18, but then skip January as they gauge the impact of successive cuts on the economy.

Inflation, while well below the 40-year high it reached in mid-2022, is still above the Fed’s annual target of 2%. Some policymakers have expressed frustration in recent days with the resilience of inflation and suggested that the pace of rate cuts may have to slow if further progress is not made.

When the Fed cuts rates next week, it will have cut interest rates by a full percentage point since September.

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