Inflation in the United States showed signs of cooling in November, as prices for everyday items—including hotels, milk, and certain types of clothing—fell. The latest Consumer Price Index (CPI) report from the U.S. Labor Department revealed that prices rose 2.7% over the 12 months to November, down from 3% in September. This easing of inflation came in below analysts’ expectations, potentially strengthening the case for the Federal Reserve to continue cutting interest rates.

Key Factors Behind the Slowdown

Several factors contributed to the unexpected slowdown in price increases:

• Holiday discounts: Retailers offered aggressive discounts in November as the holiday shopping season kicked off, according to Art Hogan, chief market strategist at B. Riley Wealth.
• Housing costs easing: The report showed a rare decline in the rate of rent and other housing-related expenses, which are heavily weighted in inflation calculations and affect many households.
• Price adjustments on tariffs: Earlier in the year, tariffs on goods like toys, appliances, and furniture had contributed to higher prices. Some of these tariffs have since been rolled back, and exemptions have been applied to consumer staples such as bananas and coffee.

However, economists caution that the easing may be partly due to data disruptions caused by the recent U.S. government shutdown, which delayed the release of the CPI report and prevented the collection of some economic data. Bernard Yaros, lead economist at Oxford Economics, warned that the November figures might “be more noise than signal.”

Political and Economic Implications

The slowdown in inflation comes amid growing pressure on President Donald Trump to deliver relief to households frustrated by years of rising costs. In a primetime address, Trump claimed that inflation had “stopped” and called on the Fed to lower borrowing costs, promising to appoint a new Fed chair “who believes in lower interest rates by a lot.”

Analysts suggest that the November CPI report could give the Federal Reserve more room to implement further rate cuts, even though inflation remains above the 2% target considered healthy. Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, noted, “Today it got to see inflation moving in the right direction… the opening for additional rate cuts just a little wider.”

Outlook for US Inflation

Despite signs of easing, economists caution that inflationary pressures may persist in other sectors. Labor shortages, partly driven by Trump’s tighter immigration policies, could continue to push up wages and costs in industries such as farming, hospitality, and construction.

The report underscores the ongoing uncertainty in the U.S. economy and highlights the delicate balance the Federal Reserve faces between supporting growth and controlling inflation. While the easing in November offers temporary relief, analysts stress that future CPI releases will be crucial for determining the path of U.S. monetary policy.