US inflation cooled more than expected in November, but economists cautioned that the data may have been distorted by the recent federal government shutdown, while most Americans said they were yet to feel any real relief from high prices for essentials, AP reported.The US Labor Department said on Thursday that the consumer price index (CPI) rose 2.7% year-on-year in November, lower than forecasts and down from 3% in September. The reading, however, remained well above the Federal Reserve’s 2% inflation target, underscoring persistent cost pressures in the economy.The inflation report itself was delayed by eight days because of the 43-day federal shutdown, which also disrupted data collection and prevented the release of CPI numbers for October. As a result, investors, businesses and policymakers received their first official inflation update since late September.Economists warned that the figures should be interpreted with caution. Diane Swonk, chief economist at KPMG, said the data were “likely a bit distorted” due to the shutdown. “The good news is that it’s cooling,” she said, adding that the disruption to government operations and contracting could itself have temporarily dampened price pressures.Similar concerns were raised by Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management, who described the November inflation numbers as “noisy”. She said the absence of October data made month-on-month comparisons impossible and the truncated data-gathering process could have introduced systematic biases.As a result, many economists said a clearer picture of inflation trends may only emerge with the December CPI report, due to be released in mid-January, shortly before the Fed’s next policy meeting.While headline inflation eased, energy prices rose 4.2% in November, driven by higher fuel oil costs. Core inflation, which excludes food and energy, rose 2.6% year-on-year, its lowest level since March 2021.Despite the moderation in inflation, consumer sentiment remained strained. High prices for groceries, insurance, utilities and housing have continued to weigh on households, a factor that analysts say has had political repercussions as well.An AP-NORC poll showed that most US adults had noticed unusually high prices for basic goods and holiday purchases in recent months. Roughly half said it was harder than usual to afford gifts, while many reported delaying major purchases or cutting back on non-essential spending.Inflation pressures have been partly attributed to President Donald Trump’s import tariffs, which imposed double-digit taxes on a broad range of imports, alongside targeted duties on steel, aluminium and automobiles. While the tariffs have proved less inflationary than initially feared, economists said they continue to exert upward pressure on prices and complicate the Fed’s policy decisions.The Federal Reserve last week cut interest rates for the third time this year, but signalled it may opt for just one rate cut in 2026, as it balances easing inflation against signs of a slowing job market.Tariffs have also added to uncertainty for businesses. Footwear maker Wolverine Worldwide said higher import costs had forced it to raise prices on some products and freeze hiring and investment. Its chief executive Christopher Hufnagel said the unpredictability of tariff policy had made long-term planning increasingly difficult.
