Inflation Rose 7.1 Percent in November, Lower Than Economists Predicted

The pace of price increases in November was lower than expected, a sign the Federal Reserve’s efforts to tamp down 📈Inflation through rate hikes may be working.

The latest report from the Labor Department found the consumer price index (CPI) rose 7.1% in November on a year-over-year basis.

Tuesday’s report shows price increases were lower than the 7.3% economists predicted to see in November.

It is also lower than the 7.7% annualized rate in October.

Additionally, core CPI — which does not include energy or food prices — rose 6% compared to last November, down 6.3% in October.

On a month-to-month basis, CPI rose 0.1% in November, lower than the 0.4% in October. And core CPI rose 0.2% in November, down from 0.3% in October.

Jason Furman, an economic adviser to former President Barack Obama, explained the 📈Inflation numbers in October and November were “driven by large falls in goods prices as service growth moderated a little.”

Meanwhile, Heather Long, an economic columnist for The Washington Post, noted that in November, gas prices decreased by 2%, utility prices were down 1.1%, used car prices were down 2.9%, airfare was down 3%, and food was down 0.5%.

The November report comes as the average price of a gallon of gas has fallen from a high of $5 in June to an average of $3.24, according to AAA as of Tuesday morning.

At the same point a year ago, the average price of gas was nine cents higher at $3.33.

While the latest report shows signs of improvement, it is still well above the Federal Reserve’s target rate of 2%.

It comes after the Fed raised its benchmark interest rate at the quickest pace since the early 1980s in an effort to curb 📈Inflation.

As The Wall Street Journal notes, the Federal Reserve is “expected to announce on Wednesday a 0.5-percentage-point increase, bringing rates to a range between 4.25% and 4.5%, the highest level since December 2007.”