Overall inflation cooled further in November, according to the last inflation report of the year, although core inflation, which the Fed watches closely, ticked up again, indicating that high prices are still continuing to weigh on employees.
The yearly rate of inflation dipped to 3.1 percent in November, according to the Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS), released today, down from the 3.2 percent rate reported in October.
On a monthly basis, the CPI rose 0.1 percent in November, seasonally adjusted, after being unchanged in October.
Core inflation, which excludes volatile food and energy components, rose 0.3 percent on month, and 4 percent from a year earlier.
The index for shelter continued to rise in November, offsetting a decline in the gasoline index, according to the BLS. The energy index fell 2.3 percent over the month. The food index grew 0.2 percent in November, after rising 0.3 percent in October, while the index for food at home rose 0.1 percent over the month and the index for food away from home rose 0.4 percent.
The report comes just ahead of the Federal Reserve's meeting on Wednesday to determine its last interest rate call of the year. The Fed has been hiking rates over the past year and a half to try to contain inflation.
Inflation has been slowing since it hit a peak of 9.1 percent last summer, but the effects of persistent high costs of living have been continually weighing on workers. As a result of high inflation and economic uncertainty, employee financial wellness hit an all-time low this year, according to a recent Bank of America report. Credit card debt has also hit a new record high.
As a result, many employers have touted financial wellness offerings and boosted pay in an effort to taper employee concerns.
Real average hourly earnings increased 0.8 percent, seasonally adjusted, from November 2022 to November 2023, the BLS reported separately today. The change in real average hourly earnings combined with a decrease of 0.3 percent in the average workweek resulted in a 0.5-percent increase in real average weekly earnings over this period.