Inflation is slowly coming down and no longer outweighing Americans’ wages

By Alicia Wallace | CNN

New York  — Sometimes boring and predictable can be good things.

The latest Consumer Price Index report wasn’t flashy by any means: The inflation gauge that measures price changes for a basket of goods and services ticked down slightly to 3.1% for the 12 months that ended in November, according to Bureau of Labor Statistics data released Tuesday.

Stripping out the more volatile components of food and energy, the core index held pat at a 4% year-over-year growth rate, staying at its lowest level since September 2021.

The latest CPI report largely came in exactly as economists had expected and served up another piece of evidence that high inflation is (very) slowly, but surely, abating.

That’s welcome news for the Federal Reserve and for Americans, who are finally starting to not have their earnings completely eaten away by rising prices.

Real average hourly earnings increased an estimated 0.8% annual rate in November, the eighth consecutive month of growth after 24 months in negative territory, according to separate data released Tuesday by the BLS.

Progress, but not yet mission accomplished

However, inflation remains above what the Fed would like to see; and steady, but still growing, prices continue to put pressure on consumers, said Tyler Schipper, economics and data analytics professor at the University of St. Thomas in St. Paul, Minnesota.

“I think there’s starting to be this trickle of good-enough economic news with some real benefits to consumers that, over time, starts to show up,” Schipper told CNN in an interview. “But if you went polling down the street right now, we’re not there yet.”

On a monthly basis, the gauge that measures price changes for a basket of goods and services ticked up 0.1% from October. Core CPI rose 0.3% from October, matching the prior month’s growth rate.

Shelter prices rose for the second consecutive month, helping to offset the fall in gas prices, which sank 5.8% from October. Food prices moderated slightly from the month before.

Economists were expecting prices to stay flat over the month and for the annual rate to ease to 3.1%, according to Refinitiv.

On Tuesday, President Joe Biden hailed the progress on inflation, as it’s now down nearly two-thirds from its peak of 9.1% hit last June.