US consumer price gains slowed by more than expected in November as energy prices fell and as Federal Reserve interest rate hikes squeeze demand for big-ticket items like houses and cars, risking a broader slump.

 

The consumer price index (CPI) — which tracks prices of a basket of finished products and services — posted a 7.1pc annual gain in November, slowing from a 7.7pc annual rise in October, the Bureau of Labor Statistics said today. The November gain was the smallest 12-month gain since the year ended in December 2021 and was down from 9.1pc in June, the highest in four decades..

 

So-called core inflation, which strips out the more volatile energy and food costs, rose at a 6pc annual pace, down from the prior month's 6.3pc rate. The rate hit 6.6pc in September, the highest since 1982.

 

Slowing inflation reinforces expectations the Federal Reserve may ease up on its aggressive course of raising rates at its final policy meeting of the year on Wednesday. The Fed is widely expected to raise its target interest rate by 50 basis points following four consecutive 75 basis-point hikes. But it may also signal it will ultimately raise its target rate higher next year than previously forecast.

 

Compared with the prior month, the CPI rose by 0.1pc in November on a seasonally adjusted basis, slowing from 0.4pc in the two prior months and well off a peak of 1.3pc in June.

 

Core CPI in November rose by 0.2pc from the prior month, following a 0.3pc gain and two consecutive 0.6pc monthly gains.

 

The core goods index in November fell by 0.5pc on the month following a 0.4pc decline in October, while services excluding energy rose by 0.4pc after a 0.5pc gain in the prior month.

 

The energy index fell in November by 1.6pc from the prior month after rising by 1.8pc in October.

 

In the 12 months through November, the energy index increased by 13.1pc, slowing from 17.6pc gain in the year through October. The gasoline index in November posted a 10.1pc annual gain after a 17.5pc gain in the prior period, and the fuel oil index rose on the year by 65.7pc after a 68.5pc gain in October.

 

The food index rose by 10.6pc over the 12-month period and the shelter index rose by 7.1pc.