Here is the breakdown of inflation for November 2024 – in one chart

Consumers saw a slight increase in inflation in November as price increases in categories such as groceries, gasoline and new cars outweighed slowdowns in other categories such as housing during the month.

The consumer price index, a key indicator of inflation, rose 2.7% last month compared to November 2023, the Bureau of Labor Statistics reported Wednesday. The annual rate rose from 2.6% in October.

“I don’t see any acceleration” in inflation, said Mark Zandi, chief economist at Moody’s. “But I think it’s too strong long-term.”

“It’s not like anyone is saying, ‘That’s the problem,'” Zandi said. “It’s quite wide, a little too high everywhere.”

However, economists say there are reasons for optimism.

Consumers can take comfort in the fact that the economic trends underlying inflation, such as moderate wage growth in the labor market, remain positive, Zandi said.

“We still believe we’re on the path to disinflation overall,” although there is some appearance of a “revival” in inflation, said Joe Seydl, a senior market economist at JP Morgan Private Bank.

Inflation has fallen significantly from its pandemic-era peak of 9.1% in June 2022.

The Federal Reserve aims for a long-term inflation target of around 2%. (The central bank uses a similar but different measure of inflation than the CPI, called the Personal Consumption Expenditures Price Index (PCE).)

“Most of that progress is now behind us and inflation could remain stubbornly near current levels for some time,” Rick Rieder, head of BlackRock’s global allocation investment team, wrote in a note on Wednesday.

While price pressures have largely eased across the U.S. economy, there have been some headwinds in recent months.

Food inflation rose significantly in November, for example from 0.1% per month in October to 0.5% in November. (For comparison, a constant CPI reading of about 0.2% per month would generally be consistent with target inflation, economists said.)

According to CPI data, egg prices rose about 8% this month alone and 38% over the past year.

“We have seen a recovery in food prices,” Zandi said. “Part of it is bird flu: egg prices continue to be very strong.”

Food prices generally fluctuate, so a month of elevated food inflation data shouldn’t raise any alarm bells, Zandi said. However, it will be an important category to keep an eye on as groceries are “probably the most important” for the majority of households in terms of pricing, he said.

In addition, categories such as transportation, health care and housing have been trouble spots, Seydl said.

Vehicle prices and airfares are important components of the transportation category. However, the recent surges in inflation are likely to be short-lived, said Seydl.

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New car prices rose 0.6% from October to November, according to CPI data. Car insurance costs rose just 0.1% during this period, but rose 13% over the year.

In 2021, car prices rose due to a shortage of semiconductors necessary for their manufacture. This led to a severe shortage of vehicles and high inflation. Prices later fell as traders rebuilt their inventories. Now some price volatility is normal as the market returns to balance, Seydl said.

Car prices are included in car insurance: As prices rise, the cost to insurers of replacing vehicles after a car accident also becomes much higher. Insurers also typically need approval from regulators to increase consumer premiums, which takes time.

Flight prices, like car prices, have also “reached a low point,” said Seydl. According to CPI data, actual fares are about the same as before the Covid-19 pandemic.

“We haven’t had any real airfare inflation from 2019 to today,” Seydl said. “We just saw a lot of volatility.”

Labor costs are the main factor driving healthcare inflation, he said.

While wage growth has largely slowed across much of the economy – generally reducing the likelihood that companies will raise prices to compensate for labor – there is still a labor shortage in the health care sector, making price strength “quite resilient,” Seydl said.

Medical care prices rose 0.4% from October to November and 4% over the year.

As the largest CPI component, property prices also continue to support overall inflation readings. According to the Bureau of Labor Statistics, shelters accounted for 40% of the monthly CPI increase.

However, it has declined significantly: The shelter index rose 4.7 percent last year, the smallest 12-month increase since February 2022, BLS said.

Rent inflation and owner-equivalent rent (an estimate of the rental price a homeowner might charge for their property) recorded the smallest increase in a month since July 2021 and April 2021, respectively.