The primary indicator of inflation used by the Fed has escalated once more.
The Price Index for Personal Consumption Expenditures increased by 2.4% in November compared to the previous year, surpassing the 2.3% rise in October, as per recent data from the Commerce Department. This growth, however, fell short of predictions, which projected a 2.5% annual increase, as per FactSet estimates.
Economists anticipated this annual increase due to comparisons with last year, when inflation saw a rapid decline, as well as some temporary price increases.
On a monthly basis, prices only went up by 0.1%, representing a slower rate of increase compared to the 0.2% rise in October. This monthly increase also fell short of the forecasted 0.2% increase, as per FactSet.
Inflation has significantly decreased this year but has been fairly stable in recent months, leading the Federal Reserve to adopt a more cautious stance towards interest rate cuts in the approaching year. Jerome Powell, the Fed Chair, stated on Wednesday that there's been "significant progress" on inflation, but uncertainties are also escalating.
Though the trend suggests that disinflation is still prevalent, there's growing uncertainty regarding how it could evolve next year. A majority of economists believe that Donald Trump's policies regarding tariffs, immigration, and taxes could potentially lead to inflation.
This story is still in progress and will be updated accordingly.
The continued uncertainty in the economy might impact various business sectors, as many economists predict an increase in inflation due to policy changes. Despite the recent slowdown in the rate of price increase, the overall health of the economy remains closely tied to the performance of local businesses.
