People shop for groceries at a store in Port Washington, New York, USA on November 19, 2025.
Shannon Stapleton Reuter
Consumer prices rose less than expected in November, giving investors hope that inflationary pressures may be cooling enough to ease U.S. monetary policy than Wall Street expected.
The consumer price index rose at an annual rate of 2.7% last month, according to a delayed report from the Bureau of Labor Statistics. Economists polled by Dow Jones had expected the CPI to rise 3.1%.
Core CPI, which excludes volatile food and energy prices, was also lower than expected, rising 2.6% in 12 months. The forecast was for a 3% rise.
The monthly rate of increase was also lower than expected, with total and core CPI increasing at 0.2% versus the expected 0.3%.
This is the first report to cover the period during which the U.S. government was shut down. The outage interrupted the data collection process during that time. This also led to the cancellation of the CPI release in October. The data was originally scheduled to be released on December 10th.
Because the October CPI was canceled, Thursday’s report did not include all the usual data points of a regular CPI release. The BLS said it was not able to retroactively collect data for October but used some “non-survey data sources” to make the index calculations.
On a 12-month basis, food prices rose 2.6% and energy prices rose 4.2%. Shelter costs, which account for about a third of the index’s weight, rose 3%, showing progress toward the Fed’s overall inflation target of 2%. Shelters were a major contributor to the rise in inflation.
Economists may be hesitant to read too much into the report as the beginning of a downward trend in inflation because it does not include comparative data for October.
Still, investors perused the report for clues about the Federal Reserve’s future monetary policy moves. Earlier this month, the Fed cut its benchmark overnight interest rate by 25 basis points for the third time in a row.
“Suppressing the CPI would confirm that the Fed is focused on protecting the job market, and that means the Fed is putting a ‘put’ on the economy,” Tom Lee, Fundstrat’s head of research, said in a note ahead of Thursday’s announcement. “In other words, if the Fed is concerned about downside risks to the economy, the Fed’s ‘put’ will come into play and stock prices will rise.”
Although the probability of a January rate cut remains low, traders have started pricing in an increased chance of a March rate cut. The probability of a rate cut this month is 58.3%, up from about 53.9% on Wednesday, according to CME Group’s FedWatch tool.
Stock futures soared following the announcement. S&P 500 futures were up about 0.5% as of 8:39 a.m. ET. A rise would end the benchmark index’s four-day losing streak. U.S. Treasury yields have fallen, with the 10-year yield in recent trading at around 4.11%.
—CNBC’s Sean Conlon contributed reporting.
