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Inflation in the U.S. eased in November, but the apparent cooling should be taken with a grain of salt because normal data collection was disrupted by the government shutdown. Prices, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), rose 2.7 percent year-over-year in November, a decline from 3.0 percent in September. Core inflation, which excludes the volatile food and energy categories, also edged down from 2.7 to 2.6 percent over the same period.

The government shutdown pushed November price collection later than usual, when holiday sales were in effect, likely making the year-over-year inflation rate look lower than it otherwise would. In addition, because prices were not collected during the shutdown in October, the Bureau of Labor Statistics assumed no price growth for the month. Since the CPI is constructed by linking month-to-month changes in the index, this assumption is likely to further drive down November’s reading. Taken together, these data quirks warrant extra caution when interpreting inflation rates – both overall and across individual product categories.

With those caveats in mind, the year-over-year picture shows utility gas prices up 9.1 percent, as strong global demand pushed U.S. exports ahead of domestic production. Electricity, household furnishings, other services, food away from home (meals at restaurants), used cars, and housing posted price increases of three percent or more. Medical care, food at home (groceries), alcoholic beverages, recreation, education and communication services, gasoline, new vehicles, and apparel rose by less than three percent. No major categories saw price declines.

Inflation data for December will be published by the Bureau of Labor Statistics on Tuesday, January 13.

Colin Baker
Manager of Economic Research
[email protected]

Clara Richardson
Research Analyst
[email protected]