ORLANDO, Fla. – Inflation in the United States edged up slightly last month, highlighting that some prices continue to stay high as the holiday season draws near.
The latest Consumer Price Index, released Wednesday by the Labor Department, offers a snapshot of where prices are rising — and what it might mean for your wallet.
News 6 anchor Bridgett Ellison sat down with CBS News business analyst Jill Schlesinger to break down the numbers.
Bridgett: Jill, walk us through the latest numbers?
Schlesinger: Well, the inflation rate did accelerate during the month of November. In fact, prices are up by 2.7% from a year ago. So it’s kind of a bummer because that’s a little bit hotter than we were in the previous month. I know it was largely expected by economists, but nobody likes to see the numbers moving in the opposite direction from where we’d like. Now, the core rate, which removes food and energy, shows prices up by 3.3% when you take those volatile categories out. That matches the previous month. But again, it’s just taking a lot longer than anyone would like. We went very fast to get the inflation rate down from over 9% to 3%. But going from 3% to 2%, it’s taking much longer.
Bridgett: What’s the overall feeling about prices now?
Schlesinger: We just got a fresh survey from the New York Federal Reserve Bank, and it showed that consumers believe the inflation rate will remain at about these levels, not just for the next couple of months but for the next couple of years. Interestingly, despite that they don’t think inflation is going back down toward 2% anytime soon, people expressed optimism about their personal financial situations. I think that’s kind of intriguing. Like, wait, you think prices are going to stay high, but you’re feeling OK? Maybe they’re making more money. I don’t know. Here’s another notable part of that survey: the share of people who expect to be worse off dropped, and households reported lower prospects of missing debt payments. So this is kind of up and down the income perspective—people seem to be largely coping with these newer levels of inflation.
Bridgett: Where are we seeing high prices?
Schlesinger: Category by category is really tough, right? Those egg prices… it’s so annoying because one month they’re down, then they’re up. There are a lot of different factors, but they are 37% higher than they were a year ago. Hey, good news—you want to swap out maybe cereal for eggs in the morning? Cereal prices dropped by the most in one month since records going back to 1989. Now, I don’t know. Maybe you don’t want to carb up. I get it. But if you want to look at other areas, it’s really shelter that is accounting for a lot of the problems in the inflation report. Remember, if you’re paying rent or buying a new house and you’ve got a high mortgage, the idea of your housing costs is where so much of a family’s household income is going. So I think that’s really the culprit behind why the inflation rate remains above where the Fed would like it to be.
Bridgett: Would you say those are the biggest influences when we talk about confidence and spending? Or would it be something different?
Schlesinger: No, I think that, listen, there are two parts of the way a consumer looks at their own pocketbook: what’s coming in and what’s going out, right? If wages are rising faster than the inflation rate, people are going to feel better. And you know what? We are human beings. We’re getting used to prices being higher. We’re going to see this over and over. We’re going to look back on this period and say, wow, wasn’t that wacky that those egg prices were really high? But we are kind of getting used to the fact that it costs more to go out to dinner, to get a lunch sandwich. All of these things are part of the human psyche, and it helps that wages are rising faster than the inflation rate now. So people are catching up.
Bridgett: Could this impact the last Federal Reserve meeting for 2024 and rate cuts?
Schlesinger: I don’t think the Fed is going to be derailed. I think they are set to cut interest rates by a quarter of a percentage point when they meet next week. What happens in 2025, though, is really up in the air. We have our first 2025 Fed meeting in January, and the second one is in March. The results of those meetings will hinge on data and also on how new policies enacted by the Trump administration will impact the overall economy. So I think we get our quarter of a percentage point next week. Then I think the Fed might go on hold in January and wait and see.
You can catch Jill on CBS Mornings and the Evening News with Norah O’Donnell.