November CPI: Inflation rose at annual 7.1% over last year

Inflation slowed again last month, more than expected, as the Federal Reserve raised interest rates at the fastest pace in decades.

The Consumer Price Index (CPI) in November showed a 7.1% increase over last year and 0.1% increase over the month, the Bureau of Labor Statistics said Tuesday. Economists had expected prices to rise at an annual 7.3% clip and 0.3% month-over-month, per Bloomberg data.

On a “core” basis, which strips out the volatile food and energy components of the report, prices climbed 6.0% year-over-year and 0.2% over November. Consensus estimates called for a 6.1% annual increase and 0.3% monthly increase in the core CPI reading.

U.S. stocks futures futures surged following the release.

The Federal Reserve keeps a closer eye on “core” inflation, which offers policymakers a more nuanced look at inputs like housing. The headline CPI figure, in contrast, has moved largely in tandem with erratic energy prices this year.

While falling oil prices sent headline inflation lower last month, the shelter category of CPI — which accounts for 30% of overall CPI and 40% of the core reading — was the dominant contributor to the monthly all-items increase and more than offset declines in energy indexes.

The cost of shelter rose 7.1% over the last year, comprising nearly half of the total increase in core CPI, the Bureau of Labor Statistics said.

“Housing costs have a unique, symbiotic relationship with inflation,” Bright MLS Chief Economist Lisa Sturtevant said in a note.

(This post is breaking. Please check back for updates.)

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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