The Bureau of Labor Statistics on Thursday released the Consumer Price Index data for November 2025, which came in much lower than expected.
The report indicated a year-over-year increase of 2.7 percent in the all-items CPI, which was lower than the 3.1 percent anticipated by economists surveyed by Dow Jones. The core CPI, which excludes volatile food and energy components, rose 2.6 percent year-over-year, also below the consensus expectation of 3.0 percent.
This reading marked a deceleration from prior months. The all-items index had risen 3.0 percent over the 12 months ending in September 2025. The core rate of 2.6 percent represented the smallest annual increase since March 2021, while the headline figure of 2.7 percent was the lowest since July 2025.
Shelter costs, a significant component, increased 3.0 percent year-over-year, the smallest rise since August 2021. Food prices advanced 2.6 percent annually, and energy prices rose 4.2 percent.
Month-over-month figures were affected by unique circumstances. The Democrat-led government shutdown disrupted data collection in October 2025, leading to the cancellation of that month’s CPI release. As a result, the reported month-over-month changes — 0.2 percent for both headline and core CPI — reflect adjustments over a two-month period from September to November, using available non-survey data where necessary.
Compared with past reports, the November figures continue a broader pattern of disinflation observed through 2024 and 2025. Annual CPI rates had hovered near or above 3 percent in much of the prior year, reflecting lingering pressures from earlier supply chain issues and demand recovery following the COVID-19 pandemic.
Looking ahead, the report indicates ongoing progress toward the Federal Reserve’s 2% inflation target. The deceleration in core measures, which the Fed monitors closely for underlying trends, suggests that price pressures are easing further. This could provide room for continued policy accommodation, including potential interest rate adjustments to support employment and economic growth.
Market participants interpreted the data as supportive of such easing, with increased pricing for reductions in early 2026.
“I was surprised. It was a better number than anyone was expecting,” Harvard Professor of Economics Ken Rogoff said while speaking with CNN. He then noted that inflation had remained high over the last several years before emphasizing that the latest report provided much better numbers than expected.
“But, you know, people were expecting it to be above 3 percent. It was well below 3 percent. I mean, I think the president will take this as good news. The investors will think that interest rates will get cut more,” Rogoff went on. “So, you know, it was it was a positive news. There’s no other way to spin it.”
