The annual inflation rate in the United States rose to 2.7% in November 2024, marking the second consecutive month of an uptick. This increase, from 2.6% in October, was in line with analysts’ expectations. The rise was partly influenced by low base effects from the previous year, meaning the comparison against a weaker 2023 helped drive the current inflation trend. Despite this, energy costs declined at a slower pace, with gasoline and fuel oil prices dropping less than in October.

Food and Vehicle Prices Contribute to Inflation

Inflation accelerated for food prices, which rose 2.4% in November, up from 2.1% in October. Meanwhile, prices for new vehicles decreased at a slower rate (-0.7% vs. -1.3%), contributing to the overall inflationary pressure. However, shelter costs saw a slight slowdown, with the inflation rate for housing decreasing to 4.7% from 4.9%, and transportation inflation also eased to 7.1% from 8.2%. Notably, prices for used cars and trucks continued to fall at the same rate as in October, -3.4%.

Monthly CPI Movements

On a monthly basis, the Consumer Price Index (CPI) rose by 0.3% in November, the largest monthly increase since April. This was slightly above October’s 0.2% increase and matched analysts’ forecasts. The housing sector was the largest contributor to this rise, with the index for shelter accounting for nearly 40% of the overall increase. The core CPI, which excludes food and energy prices, increased by 3.3% year-over-year and 0.3% from the previous month, consistent with the October numbers.

Looking Ahead: The Fed’s Response to Inflation

While the increase in inflation is partly attributed to base effects and some areas showing slower price increases, the Federal Reserve will closely monitor these trends. With inflation still above the Fed’s 2% target, future monetary policy decisions will depend on upcoming economic data. The central bank’s continued tightening measures aim to curb inflation, but the trajectory remains uncertain as economic conditions evolve in the coming months.