Annual inflation growth, as measured by the Consumer Price Index (CPI), fell to 2.7% in November, below the consensus estimate of 3.1%. In addition, core CPI, which strips out volatile food and energy prices, tallied at 2.6%, the lowest rate since March 2021. However, economists warn that these figures should be taken with a grain of salt given data collection disruptions stemming from the government shutdown.
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“Maybe this report gives a minor downward sign for overall inflation, but the vast, vast majority of this is just noise and should be ignored,” said UBS economist Alan Detmeister.
Incomplete BLS Data Raises Questions on Inflation
The Bureau of Labor Statistics (BLS) was unable to release October’s CPI figures, while November’s data contains missing components. Harvard economist Jason Furman noted that November inflation may have been overstated as a result of the BLS “effectively assuming” 0% shelter inflation.
Furthermore, Pantheon Macroeconomics Chief U.S. Economist Sam Tombs pointed out that the BLS only started collecting November’s data on the 14th of the month, two days after the shutdown ended on the 12th. That signals an incomplete report that is “hard to take” seriously, said Navy Federal Credit Union Chief Economist Heather Long.
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