Prices cooled last month, raising hopes that inflation is easing

Prices cooled again in November, giving some relief to households and businesses being squeezed by high inflation and the Federal Reserve’s ongoing fight to slow the economy.

Data released Tuesday morning by the Bureau of Labor Statistics showed that prices rose 7.1% in November compared with last year, the smallest year-over-year increase since last December.

Prices also climbed 0.1% over October, beating analysts’ expectations.

And a measure known as “core inflation,” which strips out volatile categories like food and energy, rose 0.2% – the smallest increase since August 2021.

While those figures are way too high for a healthy economy, they showed further progress since the most recent inflation report and offered policymakers and the American public fresh hope that the Fed’s aggressive moves to tame inflation are paying off.

The worrisome reality, though, is that the inflation picture has zigged and zagged in many directions this year.

In some months, data came in worse than expected. Others brought a fleeting burst of good news.

For officials at the Fed to know if their onslaught of rate hikes is working, they need to see months of steady progress – even if it means causing a recession to get there.