US inflation unexpectedly slowed in November, according to the government's first monthly report following a federal shutdown that led to no data reported for October.
The consumer price index (CPI) in November rose by 2.7pc from a year earlier, the smallest gain since July and down from 3pc in September, the Bureau of Labor Statistics (BLS) reported Thursday.
The BLS did not collect survey data for October due to a lapse in appropriations because of the 43-day federal government shutdown that ended on 12 November. President Donald Trump sacked the BLS director in August after labor market revisions revealed unexpected job losses in prior months.
"November's CPI data have to be treated cautiously, given that CPI data collection resumed only on the 14th after the end of the shutdown," Pantheon Macroeconomics said in a note after the report.
CME's FedWatch tool after the report showed a 26.6pc chance the Federal Reserve will cut its target rate in January, up from 24.4pc on Wednesday. The Fed last week cut its target rate by a quarter point, the third such reduction this year, and penciled in only one such cut next year and in 2027.
So called core inflation, which strips out volatile food and energy, slowed to a 2.6pc annual pace in November from 3pc in September. Services less energy services, a measure of core services inflation, rose by 3pc in November compared with a 3.5pc gain in September.
The energy index rose by 4.2pc on the year, up from a 2.8pc gain in September, BLS said. The gasoline index rose by an annual 0.9pc in November compared with a 0.5pc decline in September.
The fuel oil index rose by 11.3pc in November, surging from a 4.1pc gain in September, and the energy services index rose by 7.4pc in November, accelerating from a 6.4pc gain in September.
The shelter index rose by 3pc in November, slowing from 3.6pc in September
New vehicles rose by 0.6pc in November while used vehicles rose by 3.6pc.
The food index rose on the year by 2.6pc in November following a 3.1pc gain in September. Meats, poultry, fish and eggs rose by 4.7pc in November.
Medical care services rose by 3.3pc in November after a 3.9pc gain in September. Household furnishings and decorations, which are affected by import tariffs, rose by 4.6pc after a 4.1pc gain in September.
