Gas prices helped lower US inflation to 3.1% in November.

Photograph: Bloomberg/Getty Images

  In the United States, inflation saw a slight decrease last month, aided by lower gas prices, which contributed to alleviating the burden of consumer price increases.

However, the most recent data on consumer inflation reveals that prices in certain sectors, such as services including restaurants, used cars, and auto insurance, continued to experience uncomfortably rapid increases.

The report from the Labor Department on Tuesday indicated that the Consumer Price Index (CPI) inched up by just 0.1% from October to November. In comparison to the same period a year earlier, prices registered a 3.1% increase in November, a slight dip from the 3.2% year-over-year rise recorded in October.

Core prices, excluding the volatile categories of food and energy, exhibited a 0.3% rise from October to November, slightly higher than the 0.2% increase in the previous month. On a year-over-year basis, core prices increased by 4%, consistent with the October figure. The Federal Reserve typically considers core prices as a more reliable indicator for predicting the future trajectory of inflation.

The mixed signals in Tuesday's inflation report are likely to maintain the Federal Reserve's course of leaving its benchmark interest rate unchanged at the conclusion of its latest meeting on Wednesday. Despite inflation still surpassing the Fed's 2% annual target, the central bank's officials are expected to keep rates high, given the faster-than-expected cooling of inflation. This suggests that, at least for now, there may be no immediate need to further raise rates.

The Federal Reserve's anticipated decision to maintain the current key rate implies that it may have concluded its series of interest rate hikes. The central bank's key rate is currently at around 5.4%, the highest level in 22 years, reflecting a determined effort to curb inflation. The Fed's series of rate hikes has led to increased costs for mortgages, auto loans, business borrowing, and other forms of credit, aligning with the goal of slowing borrowing and spending to control inflation.

The decline in gas prices has played a role in curbing inflation, with the national average dropping to $3.15 a gallon as of Monday. However, inflation in grocery stores has proven more persistent, impacting many households' finances.

Chair Jerome Powell and other Fed officials acknowledge the steady decline in inflation from its peak of 9.1% in June 2022. Despite this positive trend, they caution that the pace of price increases remains too high for the Fed to lower its guard.