U.S. consumer price growth slowed in November, underlining arguments for the Federal Reserve to take a pause in monetary policy tightening after the rate hike expected at its meeting next week.
The Labor Department said on Wednesday its consumer price index (CPI) was unchanged from a month earlier, slowing from the 0.3% increase seen in November.
Analysts had forecast a 0.1% increase.
In the 12 months through November, inflation rose 2.2%, in line with expectations and down from 2.5% in October.
Core CPI, a key gauge of underlying consumer price pressures that excludes food and energy costs, increased by 0.2% from a month earlier, matching consensus and the prior increase. The annual increase in the core CPI was 2.2%, also in line with analysts’ estimates.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure precisely because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Economists currently expect the Fed to move ahead with a quarter-point increase of interest rates at the end of its two-day policy meeting on Dec. 19, though skepticism over the outlook for 2019 has grown on the back of concerns about a slowdown in the global economy.
Markets are currently pricing in just one rate hike for next year, as policymakers have recently shown a more dovish stance.
Traders will pay close attention to next week’s decision, which includes an update to the Fed’s economic projections, including interest rate forecasts in the dot-plot, as well as a follow-up press conference with Fed Chairman Jerome Powell.