The pace of price increases in November was lower than expected, a sign the Federal Reserve’s efforts to tamp down Inflation through rate hikes may be working.
The latest report from the Labor Department found the consumer price index (CPI) rose 7.1% in November on a year-over-year basis.
Tuesday’s report shows price increases were lower than the 7.3% economists predicted to see in November.
It is also lower than the 7.7% annualized rate in October.
Additionally, core CPI — which does not include energy or food prices — rose 6% compared to last November, down 6.3% in October.
On a month-to-month basis, CPI rose 0.1% in November, lower than the 0.4% in October. And core CPI rose 0.2% in November, down from 0.3% in October.
Jason Furman, an economic adviser to former President Barack Obama, explained the Inflation numbers in October and November were “driven by large falls in goods prices as service growth moderated a little.”
Meanwhile, Heather Long, an economic columnist for The Washington Post, noted that in November, gas prices decreased by 2%, utility prices were down 1.1%, used car prices were down 2.9%, airfare was down 3%, and food was down 0.5%.
The November report comes as the average price of a gallon of gas has fallen from a high of $5 in June to an average of $3.24, according to AAA as of Tuesday morning.
At the same point a year ago, the average price of gas was nine cents higher at $3.33.
While the latest report shows signs of improvement, it is still well above the Federal Reserve’s target rate of 2%.
It comes after the Fed raised its benchmark interest rate at the quickest pace since the early 1980s in an effort to curb Inflation.
As The Wall Street Journal notes, the Federal Reserve is “expected to announce on Wednesday a 0.5-percentage-point increase, bringing rates to a range between 4.25% and 4.5%, the highest level since December 2007.”