The slowdown in inflation was driven by food, energy and used vehicles.
Core inflation, which strips out volatile food and energy prices, slowed to 6 percent over the year, an indication that price increases are slowing broadly.
A rise in food prices, which had been propelling rapid inflation for more than a year, appears to be cooling off. Although food overall is 10.6 percent more expensive than it was at this time last year, items like meat dropped in price over the past month, and food served at restaurants rose less quickly than it has over the past quarter.
Energy prices continued to fall in November, partially as a result of the Covid-related lockdowns in China, which decreased demand. (Those lockdowns have recently been eased.) The cost of gas used to heat homes fell for the second straight month, while fuel oil — which is more prevalent in New England — continued to rise slightly, and is up 65.7 percent over the year.
Critically for the Federal Reserve, core inflation — which strips out volatile food and energy — is decelerating, to 6 percent over the year. That’s an indication that price increases are slowing broadly.
The original item to skyrocket in price, used cars, is definitively rolling over as auto manufacturing has ramped up and strained consumers begin to push back. Prices in the new car market stalled out, but have yet to fall.
The cost of rent continues to drive overall inflation, though the Labor Department’s measure is backward-looking; more current indicators have shown new leases dropping sharply in some markets.
Owners’ equivalent rent, which tracks elements such as insurance, mortgage interest and overall home prices, has decelerated only slightly in recent months despite rapidly rising interest rates.
Prices for medical care services, which had been accelerating as patients started to come back for their normal procedures after the pandemic, dropped for the second month in a row.
Flight fares continued to fall going into the holidays as airlines managed to add planes and fuel prices eased.
And if you’re out holiday shopping, books and toys would be good options, as they’ve both been dropping in price for several months (but remain solidly above 2019 levels). Electronics might be even better, as they’re back to prepandemic prices.
Lydia DePillis is a reporter on the Business desk who covers the changing American economy and what it means for peoples’ lives. More about Lydia DePillis
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