Inflation dropped more sharply than economists predicted in November, giving U.S. consumers long-awaited relief and bolstering President Donald Trump’s argument that the price surge that began under the previous administration has finally been reversed.
The Department of Labor reported Wednesday that the consumer price index rose 2.7 percent year-over-year.
The figure is down from three percent in September and well below the 3.1 percent economists expected.
The release had been delayed due to the government shutdown that stretched from early October to mid-November.
Trump celebrated the new data in a prime-time national address Wednesday night.
“Very simple, we are making America great again tonight,” the president said.
“After 11 months, our border is secure. Inflation is stopped.
“Wages are up. Prices are down.”
Prices Cool Across Key Categories
The report showed broad easing across the economy:
• Hotel stays, recreation, and clothing costs fell
• Shelter costs, typically one of the stickiest components, rose just 0.2 percent over the two-month period since the last report, the slowest pace in nearly five years
• Food prices rose only 0.1 percent, the mildest grocery inflation in months
Because the October report was never released (data collection gaps during the shutdown prevented month-over-month calculations), the November data were compared with September.
Overall prices rose a modest 0.2 percent, far less than anticipated.
Core Inflation at Lowest Level Since Early 2021
Core CPI, which excludes food and energy, rose 2.6 percent from a year earlier, below expectations for three percent and marking the lowest reading since early 2021.
Compared with September, core prices increased just 0.2 percent.
Inflation came in below virtually all forecasts.
Econoday’s survey had placed the low end of expectations at 2.9 percent for headline CPI and 3.0 percent for core.
Looking at annualized trends, a useful measure given the missing monthly figures:
• Headline CPI rose 2.1 percent on a three-month annualized basis
• It rose 2.8 percent on a six-month basis
• Core CPI climbed 1.6 percent annualized over the last three months and 2.6 percent over six
Tariff-Protected Sectors Show Strong Price Stability
Several categories tied closely to Trump’s tariff and reshoring policies showed minimal inflation:
• Core goods: up 1.4%
• Durable goods: up 1.5%
• Major appliances: up 1.2%
• Apparel: up 0.2%, with women’s clothing down 1%
• New cars: up 0.9%
• New trucks: up 0.6%
Most remaining inflation is concentrated in services, where prices excluding energy rose three percent, including a similar increase in shelter.
Markets React as Fed Gains More Room to Cut Rates
With inflation easing faster than expected, investors believe the Federal Reserve will have greater flexibility to cut interest rates in 2026.
Bond yields fell after the release, and stock futures climbed, reflecting expectations of a more accommodative monetary policy ahead.
The consumer price index tracks prices for both domestic and imported goods, meaning tariff effects are directly incorporated into the measure.
The data gives the Trump administration a significant boost as it continues touting economic stabilization, wage growth, and declining prices after years of persistent inflation under former President Joe Biden.
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