United States consumer inflation slowed more than expected in the year to November, with the data distorted by gaps caused by a prolonged federal government shutdown, complicating the outlook for policymakers.
Fresh data from the Bureau of Labor Statistics (BLS) showed the consumer price index (CPI) rising 2.7% on a year-on-year basis in November, below market expectations for a 3.1% increase.
However, no month-to-month inflation rates were published, marking an unprecedented disruption to one of the most closely watched U.S. economic indicators.
The BLS said the moderation in inflation was partly due to the 43-day government shutdown, which delayed price data collection until the second half of November, when retailers were already rolling out holiday season discounts.
“Over the last 12 months, the all items index increased 2.7% before seasonal adjustment. BLS did not collect survey data for October 2025 due to a lapse in appropriations.,” the agency said.
Despite the easing in headline inflation, households continued to face affordability challenges as the prices of essential goods and services climbed sharply.
Beef prices surged 15.8% from a year earlier, the largest increase since June 2020, while ground beef prices jumped 14.9%, the biggest rise in nearly 5½ years.
Coffee prices rose 18.8%, and electricity costs increased 6.9%, the steepest annual gain since April 2023.
The inflation report also carried political implications for President Donald Trump, who addressed the nation on affordability just hours before the data was released.
However, economists cautioned against reading too much into the data. The shutdown prevented the BLS from publishing monthly CPI changes, as most price data for October was not collected, leaving large gaps that reduced the reliability of the November report.
The October CPI release was cancelled entirely because the data could not be collected retroactively, the first time monthly CPI figures have not been published.
Federal Reserve Chair Jerome Powell acknowledged the disruption last week, saying policymakers would examine the delayed data “carefully and with a somewhat skeptical eye, given the disruptions to collection during the shutdown.”
Analysts expect inflation pressures to re-emerge in December, as businesses continue to pass on higher costs from import tariffs and as rapid growth in artificial intelligence and cloud computing drives increased electricity demand.
ANZ analysts said: “While the downward surprise, at face value, supports the case for further Fed easing, the uncertainty surrounding this report owing to the lack of October data and the later-than-usual start to the surveying period in November due to the government shutdown, mean it’s likely to be discounted to some extent.”
Retailers typically offer heavy discounts in late November on items such as apparel and appliances, which economists said likely injected a downward bias into the inflation data.
Trump’s sweeping import duties have pushed up prices for many goods, although economists noted the pass-through has been gradual as firms worked through pre-tariff inventories and absorbed some of the costs themselves.
The president has since rolled back duties on certain items, including beef, bananas and coffee.
Some price categories showed relief. Egg prices fell 13.2% year-on-year, while gasoline prices increased just 0.9%.
New motor vehicle prices rose 0.6%, as automakers absorbed much of the tariff-related cost pressure.
Excluding volatile food and energy prices, core CPI increased 2.6% from a year earlier, the smallest rise since March 2021 and coming in well below market expectations of 3%.
Core inflation was previously running at 3.0% in September. From September to November, core CPI rose 0.2%.
Shelter costs, which make up more than 40% of the core CPI basket, increased 0.2% over the same period.
The Federal Reserve last week cut its benchmark overnight interest rate by 25 basis points to a range of 3.50%–3.75%, but signalled that further easing was unlikely in the near term as policymakers await clearer signals from inflation and the labour market.
The Fed targets 2% inflation using the personal consumption expenditures price index rather than CPI data.
Meanwhile, separate labour market data pointed to continued stability. Initial jobless claims fell by 13,000 to a seasonally adjusted 224,000 in the week ended December 13.
However, continuing claims rose by 67,000 to 1.897 million in the week ended December 6, suggesting displaced workers are taking longer to find new jobs amid tepid hiring.
