Inflation Rises 0.1% in November, Slightly More Than Expected
Inflation in the United States continued to ease in November, with a 0.1% rise in the consumer price index compared to the previous month. While this increase was slightly more than expected, it is important to note that prices climbed 3.1% from the same time last year, in line with estimates by Refinitiv economists. However, this is a decrease from the 3.2% recorded in October.
“Falling inflation does not mean that prices are falling. In fact, prices for just about everything are still higher than they were before the pandemic,” said Lisa Sturtevant, chief economist at Bright MLS.
Rent: Housing Costs Continue to Rise
Housing costs were the biggest driver of core inflation in November, with rent costs rising 0.5% for the month and 6.5% from the same time last year. This is concerning as higher housing costs directly impact household budgets. Additionally, another data point that measures equivalent rent for homeowners climbed 0.5% from the previous month.
“Housing costs, in particular, are weighing on many individuals and families,” Sturtevant said. “Rent pressures have started to ease in some regions, which will eventually be reflected in the CPI numbers. Home prices, however, are still on the rise in much of the country.”
Housing Affordability Plummets as Food Prices Increase
The cost of groceries increased for the eighth consecutive month in November. Grocery prices climbed 0.1% over the course of the month and remain up 1.7% compared to the same time last year. Consumers faced higher prices for staples such as eggs, breakfast cereal, apples, citrus fruits, potatoes, carbonated drinks, coffee, and butter. However, there were also declines in the cost of bread, beef and veal, pork, ham, chicken, bananas, and bread.
Energy Prices Drop, Good News for Car Buyers
Energy prices experienced a substantial drop in November for the second consecutive month, with a 2.3% decrease overall. Gasoline prices fell by 6% during this period. Previously, gasoline costs had been increasing due to supply cuts by OPEC+ and turmoil in the Middle East. The average cost of a gallon of regular gasoline fell to $3.36 last month, and prices have continued to decrease since then.
There was some positive news for Americans looking to purchase a new car in November. The cost of new cars and trucks decreased by 0.1%, while used car and truck prices unexpectedly increased by 1.6% amid the UAW strike against Ford, Stellantis, and General Motors. However, used vehicle prices remain down 3.8% compared to the same time last year.
Airline Fares Continue to Fall
Airline fares saw a decrease of about 0.4% in November, with costs down approximately 12.1% compared to last year.
Overall, while inflation eased in November, housing costs and food prices remain concerns for Americans. Energy prices have dropped, providing some relief, and there have been fluctuations in the cost of vehicles. The ongoing decrease in airline fares is also worth noting.
Source: Labor Department, Bright MLS, AAA