People buy groceries at a store in Port Washington, New York, USA, November 19, 2025.
Shannon Stapleton | Reuters
Consumer prices rose less than expected in November, giving investors hope that inflation pressures could cool enough to ease U.S. monetary policy more than Wall Street expects.
The consumer price index rose 2.7% on an annual basis last month, according to a delayed report from the Bureau of Labor Statistics. Economists polled by Dow Jones expected the CPI to rise 3.1%.
The core CPI, which excludes volatile food and energy prices, was also weaker than expected, rising 2.6% over 12 months. An increase of 3% was expected.
Monthly increases were also smaller than expected, with both headline and core CPI rising 0.2%, compared with estimates of 0.3%.
This is the first report to cover the period when the U.S. government was closed. The disruption halted the data collection process at this time. This also led to the cancellation of the October CPI release. This data was originally scheduled to be released on December 10th.
Because October’s CPI was omitted, Thursday’s report did not include all the usual data points of a typical CPI release. The BLS said it was unable to collect the October data retroactively but used some “non-survey data sources” for the index calculations.
On a 12-month basis, food prices increased by 2.6% and energy prices increased by 4.2%. Housing costs, which account for about a third of the index’s weight, rose 3%, indicating progress toward the Fed’s overall inflation target of 2%. Shelter had contributed significantly to the increased inflation values.
Economists may be hesitant to interpret this report too much as the start of a downward trend in inflation, as the release does not include comparable data for October.
Still, investors analyzed the report looking for clues about future monetary policy moves from the Federal Reserve. The Fed cut its federal funds rate by 25 basis points for the third consecutive month earlier this month.
“A tame consumer price index will strengthen the Fed’s focus on protecting the labor market. And that means a Fed ‘put’ on the economy is now in effect,” Tom Lee, head of research at Fundstrat, said in a note ahead of Thursday’s release. “In other words, if the Fed is concerned about downside risks to the economy, the Fed ‘put’ comes into play and this would cause stocks to rise.”
The chances of a rate cut in January remained slim, but traders began to price in a higher probability of a rate cut in March. CME Group’s FedWatch tool showed a 58.3% chance of a rate cut for the month, up from around 53.9% on Wednesday.
Stock futures jumped following the release. S&P 500 futures were up about 0.5% at 8:39 a.m. ET. A gain would end a four-day losing streak for the benchmark index. Treasury yields have fallen, with the 10-year Treasury yield most recently at around 4.11%.
—CNBC’s Sean Conlon contributed reporting.
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