Ahead of the Federal Open Market Committee’s meeting next week to decide on another rate cut, the latest consumer price index Wednesday showed a slight uptick in inflation.
The annual inflation rate grew to 2.7 percent at the end of the November, with prices increasing by 0.2 percent during the month, according to the Bureau of Labor Statistics. Inflation was at 2.6 percent in October ahead of the FOMC’s decision in November to cut the target interest rate by 25 basis points to 4.5 to 4.75 percent. It was the second straight meeting for the FOMC to make cuts, reducing rates from a peak of 5.25 to 5.5 percent by 75 basis points.
Federal Reserve Chairman Jerome Powell noted after the last FOMC meeting the continued goal of getting inflation closer to 2 percent and protecting labor market. The FOMC will meet December 17-18, its final meeting of 2024.
“We know that reducing policy restraint too quickly could hinder progress on inflation. At the same time, reducing policy restraint too slowly could unduly weaken economic activity and employment. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. We are not on any preset course. We will continue to make our decisions meeting by meeting,” Powell said.
The economy added 227,000 jobs in November. It was a spike after the economy added just 36,000 jobs in October. The monthly average for the past year has been 186,000.
The unemployment rate remained at 4.2 percent.
The average hourly earnings increased by 13 cents, or 0.4 percent, in November to $35.61.
Prices on goods minus the volatile food and energy sectors increased 0.3 percent in November. The all-items-less-food-and-energy index annual rate grew to 3.3 percent last month.
Used vehicles jumped on the index by 2 percent in November. It followed a 2.7 percent increase in October. For the year, used vehicle prices are down 3.4 percent on the index.
Gas prices continue to fall and are down 8.1 percent in the past 12 months.
Drivers are continuing to see insurance prices rise. Motor vehicle insurance is up 12.7 percent in the past year.
