Shutdown-distorted November CPI shows 2.7% inflation as Americans still feel squeeze
The delayed November CPI showed inflation running 2.7% year‑over‑year (core 2.6%), a cooler‑than‑expected reading whose release was truncated and distorted by a 43‑day government shutdown that also wiped out October data, prompting economists to call the figures “noisy” and say a reliable read likely won’t come until December. Even with lower headline inflation and mixed price moves (groceries +1.9% y/y, energy +4.2%), Americans report feeling the squeeze—71% say income only meets or falls short of expenses amid slowing wage growth and a 4.6% unemployment rate—while the Commerce secretary hailed the drop as evidence of administration policies and the Fed continues to balance recent rate cuts against inflation risks.
📌 Key Facts
- The Consumer Price Index (CPI) rose 2.7% year-over-year in November — a cooler-than-expected reading — but the report was delayed and truncated because of a 43-day federal government shutdown, producing an information gap.
- The November CPI release was delayed eight days and omitted an October report; the Bureau of Labor Statistics could not compile October CPI and core inflation figures, so the November print compares September to November (0.2% increase) without an October point.
- Economists warn the November numbers are 'distorted' and 'noisy' — missing October rental data and truncated data collection (and shutdown effects on government contracting) may have biased the reading lower; many analysts say a reliable inflation read likely requires the December CPI in mid‑January.
- Core CPI (excluding food and energy) was 2.6% year-over-year in November, the lowest since March 2021, but economists caution it may not be a dependable signal given the data gaps.
- Sector details: grocery prices were up 1.9% year-over-year in November (with some items like eggs falling but increases in rent and electricity offsetting), while energy prices rose 4.2% year-over-year driven by sharply higher fuel oil prices.
- The Federal Reserve has cut its benchmark interest rate three times since September to support the job market, is signaling caution about further cuts (currently projecting just one cut in 2026), and Fed officials warned that persistent inflation risks the Fed’s credibility.
- Household finances and the labor market show strain: average wages still outpacing prices overall but wage growth has slowed, a softening job market has reduced workers’ bargaining power, and the unemployment rate was 4.6% in November (the highest since 2021).
- Political and public reaction: an NPR/PBS/Marist poll found only 36% approve of President Trump’s handling of the economy and 71% say their income only matches or falls short of monthly expenses; Commerce Secretary Howard Lutnick credited administration policies for the 2.7% reading, predicted an 'extraordinary year' and a 'golden age' of investment, emphasized lowering drug/energy/interest costs, and blamed media coverage for weak consumer confidence.
📊 Relevant Data
In November 2025, the unemployment rate for Black Americans was 8.3%, compared to 3.9% for White Americans, 5.0% for Hispanic Americans, and 3.6% for Asian Americans; Black Americans comprise about 13.6% of the U.S. population, Hispanics 19.1%, Whites 58%, and Asians 6%.
The Employment Situation - November 2025 — Bureau of Labor Statistics
Financial disparities in 2025 are deepening economic insecurity for Black and Hispanic households amid an economic slowdown, with these groups facing higher impacts from inflation due to lower savings and wealth levels.
Financial disparities will deepen economic insecurity for Black and Hispanic households amid the 2025 slowdown — Economic Policy Institute
The Trump tax law erases economic and racial progress in the tax code, with Hispanic and Black taxpayers receiving only 5% and 2% of the benefits from special breaks for pass-through income, despite comprising 15% and 11% of the US population.
Trump Tax Law Erases Economic, Racial Progress in the Tax Code — Institute on Taxation and Economic Policy
Immigration is narrowing the Black-White wage gap in America, with Black immigrants and their families contributing to wage convergence; without recent immigration, the earnings gap could widen by up to 9%.
Immigrants are narrowing the black-white wage gap in America — The Economist
📊 Analysis & Commentary (1)
"The WSJ opinion argues that metro-level CPI data show much higher price growth in several California areas, meaning national inflation figures mask a localized affordability crisis that hits California hardest."
📰 Sources (5)
- Commerce Secretary Howard Lutnick publicly framed the November 2.7% inflation reading as proof that Trump administration policies on energy, interest rates and investment are 'finally pushing down prices.'
- Lutnick predicted that 'next year' will be an 'extraordinary year' and described a coming 'golden age' driven by what he called 'trillions of dollars of investment.'
- He emphasized three policy priorities — lowering drug prices, energy prices and interest rates — and said the administration is 'hammering the price of drugs down.'
- Lutnick attributed weak consumer confidence, despite lower inflation, to 'fake news,' arguing media coverage is not reflecting the economy’s improvement.
- The article reiterates the November unemployment rate at 4.6%, noting it is the highest since 2021, as part of the broader economic picture.
- Explains that the November CPI release was delayed eight days and data collection truncated because of a 43-day federal government shutdown, which also prevented compilation of October CPI and core inflation figures.
- Economists Diane Swonk (KPMG) and Kay Haigh (Goldman Sachs Asset Management) explicitly warn the November numbers are 'a bit distorted' and 'noisy,' citing canceled October report and truncated data collection as sources of potential bias.
- Details that energy prices rose 4.2% year-over-year in November, driven by sharply higher fuel oil prices.
- Notes that core CPI at 2.6% year-over-year in November is the lowest since March 2021, but economists do not expect a truly reliable inflation read until the December CPI in mid-January.
- Adds context that the recent shutdown, especially through its hit to government contracting, may itself have contributed to temporarily cooler price readings.
- Reiterates that the Fed has already cut rates three times this year, is weighing support for a sputtering job market versus inflation risk, and is currently signaling just one rate cut in 2026, with markets likely to focus on the December CPI instead of November.
- Confirms that November CPI at 2.7% year-over-year came in lower than economists had expected.
- Notes that release of the CPI report was delayed and that there is an 'information gap' in the data due to the government shutdown.
- Highlights that this surprise to the downside is being framed by CBS as 'cooler-than-expected' inflation.
- Confirms grocery prices in November were up 1.9% year-over-year, with falling prices for some items like eggs partially offsetting increases in rent and electricity.
- Specifies that overall consumer prices rose 0.2% between September and November, with no October comparison due to shutdown-related data gaps.
- Cites economist Omair Sharif’s view that missing October rental data may have skewed November inflation lower.
- Reports new NPR/PBS News/Marist poll findings: only 36% of Americans approve of President Trump’s handling of the economy, matching Biden’s 2022 low; 71% say their income only matches or falls short of monthly expenses.
- Notes that while average wages are still rising faster than prices, wage growth has slowed and a softening job market has reduced workers’ bargaining power.
- Quotes Fed Governor Chris Waller describing an 'affordability problem' for low- and middle-income families and warning workers risk being fired if they press too hard for raises.
- Quotes outgoing Atlanta Fed President Raphael Bostic warning that persistent above-target inflation threatens Fed credibility and could entrench expectations of rapid price increases.
- Clarifies that the Fed has already cut its benchmark interest rate three times since September to support the job market and is signaling caution about further cuts.