The Bureau of Labor Statistics released its Consumer Price Index (CPI) report for November 2025 on Thursday, showing inflation cooling far more than economists had expected. The data marked a notable slowdown in price growth, reinforcing signs that inflation pressures across the U.S. economy are continuing to ease.
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According to the report, the all-items CPI rose 2.7 percent year over year, well below the 3.1 percent forecast by economists surveyed by Dow Jones. Core CPI, which excludes volatile food and energy prices and is closely watched by the Federal Reserve, increased 2.6 percent annually, also undershooting expectations of a 3.0 percent rise. The core figure represented the smallest annual increase since March 2021, while the headline CPI was the lowest since July 2025.
Several major components showed meaningful moderation. Shelter costs, the largest contributor to inflation, rose 3.0 percent year over year — the smallest increase since August 2021. Food prices climbed 2.6 percent annually, while energy prices increased 4.2 percent. Overall, the data reflected a clear deceleration from earlier months, with headline inflation having reached 3.0 percent in September 2025.
Month-over-month figures were impacted by unusual circumstances. The Democrat-led government shutdown in October disrupted federal data collection, resulting in the cancellation of that month’s CPI release. As a result, November’s reported monthly increases of 0.2 percent for both headline and core CPI reflect changes over a two-month period from September to November, using alternative data sources where standard survey information was unavailable.
Economists and market participants viewed the report as a positive signal, suggesting continued progress toward the Federal Reserve’s 2 percent inflation target. Harvard economics professor Ken Rogoff told CNN the data exceeded expectations, noting that markets are likely to interpret the report as increasing the odds of interest rate cuts in early 2026. “It was well below 3 percent,” Rogoff said. “The president will take this as good news. Investors will think interest rates will get cut more. There’s no other way to spin it.”[/read]