November Inflation Forecast
The release of inflation data this Thursday is widely anticipated to show that price increases continue to outpace the Federal Reserve's target. This report represents a crucial piece of US economic data, especially given the disruptions to the reporting schedule caused by the recent government shutdown.
The Consumer Price Index (CPI) report for November, scheduled for release at 8:30 a.m. ET on Thursday, is projected to reveal a 3.1% increase in headline prices compared to the previous year, according to Bloomberg data.
Similarly, "Core CPI," excluding volatile food and energy categories, is also expected to show a 3.1% rise year-over-year. For context, the last available inflation data from September showed both headline and core CPI increasing by 3% annually.
Economic Data Schedule and Impact of Government Shutdown
Thursday’s inflation report will be the first official reading since September, as the Bureau of Labor Statistics (BLS) had to cancel the October report due to the US government shutdown. This cancellation means that the November report will lack month-over-month comparisons for both headline and core CPI figures.
The release of major economic indicators, including the monthly jobs report and inflation data, should now return to its regular schedule after the 43-day government shutdown.
The November jobs report, released on Tuesday, revealed stronger-than-expected job creation, alongside a four-year high in the unemployment rate. The December jobs report is slated for release on January 9, 2026, resuming its typical Friday morning slot.
Factors Influencing the Inflation Outlook
According to Jeffrey Roach, chief economist at LPL Financial, inflation remains above the Fed's target, but this situation is expected to be temporary. He anticipates that easing demand in the coming months will alleviate pricing pressures, providing some relief to investors.
Bank of America economists, in their pre-release report, suggested that goods inflation may remain persistent due to tariffs, while services inflation could soften, partially driven by health insurance costs. This conflicting dynamic within the inflation data is likely to keep the Fed on hold at the conclusion of its January meeting.
Currently, market participants are pricing in only a roughly 25% probability of a rate cut by the central bank next month. The Fed's recent forecasts indicated only one additional rate cut in 2026, following three consecutive 0.25% rate cuts to conclude 2025.
Fed Inflation Target and Potential Policy
- Current Stance: The Fed is closely monitoring inflation data to determine the appropriate course for monetary policy.
- Future Actions: The central bank's decisions will be influenced by the balance between goods and services inflation, as well as overall economic demand.
The table below summarizes key data points:
| Metric | Expected Increase | Previous (September) |
|---|---|---|
| Headline CPI | 3.1% | 3.0% |
| Core CPI | 3.1% | 3.0% |
FAQs
What is the November inflation forecast and how does it compare to previous months?
The November inflation forecast projects a 3.1% increase in both headline and core CPI year-over-year. This is slightly higher than the last available data from September, which showed a 3% annual increase for both headline and core CPI, meaning inflation remains above target.
How did the government shutdown affect the economic data schedule, and what is the current status?
The government shutdown caused the Bureau of Labor Statistics (BLS) to cancel the October inflation report, disrupting the economic data schedule. The schedule is now back on track, with the November report being released and the December jobs report slated for release on January 9, 2026.
What is the Fed inflation target, and what are the potential policy implications given the latest inflation outlook?
The Federal Reserve's inflation target is below the current inflation rate, and the Fed is closely monitoring the balance between goods and services inflation. Because inflation remains above target, economists predict the Fed will likely hold rates steady at its January meeting, with market participants pricing in a low probability of a rate cut next month.
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