The U.S. Bureau of Labor Statistics just released its monthly Consumer Price Index (CPI) figures, which show price gains are slowing faster than expected. The CPI measure rose 7.1 percent in November compared to the same time last year, less than the 7.3 percent that economists were predicting and a decrease from the previous reading of 7.7 percent. This month’s CPI release comes just a day before the Federal Reserve is expected to announce its latest decision on rate hikes, which is widely presumed to be raised by half a percentage point. Also included in the announcement will be the agency’s latest economic projections.
Prices also rose slower than expected between October and November of this year while overall, inflation has been decelerating year-over-year after hitting a high in June. Many economists had expected inflation to come down to more normal numbers in the 2 percent range this year, but it has remained high due to several factors, including continued supply chain issues, rising costs of flights and car insurance, rent increases, and disruptions from the war in Ukraine. The latest CPI figure is welcome news for the real estate industry, which has kept a close eye on the measure over the past year. Inflation has driven interest rates to record highs over the last several months, which has led to a pullback in commercial lending and deal volume over the past quarter.
