Headline inflation "moderated" says NAFCU Economist

Noah Yosif

"According to data released by the Bureau of Labor Statistics (BLS), headline inflation and core inflation moderated for a second consecutive month while remaining elevated above historic levels. Headline CPI increased by 0.1 percent m/m in a marked deceleration from October’s reading, while also beating consensus estimates of 0.3 percent m/m. This decline was principally driven by lower energy prices, which contracted by 1.6 percent m/m, but offset by increased shelter and food costs, which increased by 0.6 percent m/m and 0.5 percent m/m respectively. Used vehicle prices, a major contributor to the initial inflation surge this year, also declined by 2.9 percent m/m. Against the backdrop of another, and final, FOMC meeting for 2022, November’s readings make these disinflationary trends harder to dismiss and provide grounding for the dovish faction of the FOMC to argue for a pause to rate hikes early next year. These numbers also compliment recent readings of consumer sentiment, which are improving and which reflect less anxiety over inflation. Markets jumped on the news, and credit unions should anticipate a healthy holiday shopping season as households absorb the combination of a still-strong labor market, moderating inflation, rising investment values, and stable or falling borrowing rates."
​- NAFCU Economist Noah Yosif

---