U.S. says price increases eased last month but data may be distorted and Americans aren't feeling it

WASHINGTON — At a time when Americans are frustrated and angry over the high cost of living, the federal government released a report Thursday showing that inflation had cooled unexpectedly in November.

But economists quickly warned that last month's numbers were suspect because they’d been delayed and likely distorted by the 43-day federal government shutdown. And most Americans have not felt any letup in the high prices they are paying for food, insurance, utilities and other basic necessities.

The Labor Department reported Thursday that its consumer price index rose 2.7% in November from a year earlier. Yet, year-over-year inflation remains well above the Federal Reserve's 2% target. Americans, dismayed by high prices, handed big victories to Democrats in local and state elections last month.

On Long Island and in the metropolitan area, consumer prices rose 3% in November, compared with a year earlier. That was the same rate of growth as in September — and the slowest since February 2024. No pricing data was collected in October due to the federal government shutdown.

Economist John A. Rizzo, a professor at Stony Brook University, said the top line number for the regional consumer price index “masks more serious inflation” last month, specifically the 3.9% jump in grocery prices and 8.4% jump in electricity, natural gas and other home energy.

“So, in terms of two key components of inflation — food you purchase at the grocery store and energy to heat and light your home — inflation remains problematic on Long Island, particularly for low- and middle-income people,” Rizzo told Newsday.

In November, in the metropolitan area, the rise in grocery prices was largely driven by increases in the cost of meat and cereal, up 5.8% and 5.4%, respectively, year over year.

The pace of residential rent hikes slowed to 3.7% after hovering around 5% or more for months. The cost of gasoline climbed 1.6% after falling for months.

The inflation reports, both national and regional, were delayed eight days by the shutdown, which also prevented the Labor Department from compiling overall numbers for consumer prices and core inflation in October and disrupted the usual data-collecting process. Thursday’s report gave investors, businesses and policymakers their first look at CPI since the September numbers were released on Oct. 24.

Nationally, consumer prices had risen 3% in September from a year earlier, and forecasters had expected the November CPI to match that year-over-year increase.

“It’s likely a bit distorted,’’ said Diane Swonk, chief economist at the tax and consulting firm KPMG. “The good news is that it’s cooling. We’ll take a win when we can get it."

Still, Swonk added: “The data is truncated, and we just don’t know how much of it to trust.’’ By disrupting the economy — especially government contracting — the shutdown may have contributed to a cooling in prices, she said.

Many economists don't expect to get a reliable read on inflation until next month, when the Labor Department releases CPI numbers for December.

Energy prices, driven up by sharply higher fuel oil prices, rose 4.2% in November. Excluding volatile food and energy prices, so-called core inflation rose 2.6%, compared with a 3% year-over-year gain in September and the lowest since March 2021.

U.S. inflation remains stubbornly high, partly because of President Donald Trump’s decision to impose double-digit taxes on imports from almost every country, along with targeted tariffs on specific products like steel, aluminum and autos.

The president’s tariffs have so far proved less inflationary than economists feared. But they do put upward pressure on prices and complicate matters at the Fed, which is trying to decide whether to keep cutting its benchmark interest rate to support a sputtering job market or whether to hold off until inflationary pressures ease. The central bank last week decided to reduce the rate for the third time this year, but Fed officials signaled that they expect just one rate cut in 2026.

Trump delivered a politically charged speech Wednesday that aired live during prime time on network television, seeking to pin the blame for economic challenges on Democrats.

The speech was a rehash of his recent messaging that has so far been unable to calm public anxiety about the rising cost of groceries, housing, utilities and other basic goods.

As the holiday season approaches, Americans are dipping into savings, scouring for bargains and feeling like the overall economy is sputtering, a new AP-NORC poll found.

The vast majority of U.S. adults said they’ve noticed higher-than-usual prices for groceries, electricity and holiday gifts in recent months, according to the survey from The Associated Press-NORC Center for Public Affairs Research.

Roughly half of Americans said it’s harder than usual to afford the things they want to give as holiday gifts, and similar numbers are delaying big purchases or cutting back on nonessential purchases more than they would normally.

Trump has promised an economic boom, yet inflation has stayed elevated and the job market has weakened in the wake of his import taxes.

Trump’s tariffs are taking a toll on companies like Wolverine Worldwide, which makes footwear brands like Merrell and Saucony. Facing extra tariff costs of $10 million this year and $55 million in 2026, the Rockford, Michigan, company had to increase prices between 5% and 8% on some products in June, and will have to raise prices again next year.

The problem isn’t just the cost of the tariffs. It’s also the uncertainty caused by the unpredictable way that Trump rolls them out. “Just tell me what the bad news is, and I’ll go work to try to solve for it," said Wolverine CEO Christopher Hufnagel. "It’s the uncertainty of how it actually plays out that causes so much trouble because then we’re modeling all these different scenarios and it seems like things can change in the middle of the night.”

Newsday's James T. Madore contributed to this story.