November CPI preview: Detour around the October pothole

Summary

The government shutdown disrupted data collection for the October CPI, so BLS will not be publishing headline or core inflation figures for the month. November indices should be published as usual, albeit with the prospect of slightly lower collection rates.

With aggregate indices unavailable for October, the short-term take on inflation will need to be viewed as the two-month percentage change. We estimate headline CPI rose 0.45% between September and November, leaving the year-over-year pace at 3.0%. Over the past two months, energy inflation was modest, while food price growth is expected to have cooled as commodity prices have eased. Excluding food and energy, we estimate core CPI rose 0.48% between September and November, as easing vehicle inflation is anticipated to be offset by a rebound in medical care services. If realized, the year-over-year rate of the core CPI will edge down to 2.9%.

Looking past near-term volatility in the CPI as regular collection processes resume, the underlying trend in inflation is stable. The lingering effects of tariffs are likely to cause a further uptick in goods inflation over the next few months as firms revisit pricing early next year, but we expect overall inflation to hold near 3.0% through the first half of 2026. As the year progresses, we anticipate easing tariff pressures, a soft labor market and solid productivity gains will spur a gradual descent toward 2%.

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