U.S. inflation ticked higher in November while core price pressures held at multiyear lows, potentially completing the picture for the Federal Reserve’s end-of-year interest-rate decision next week.
The Commerce Department said its headline Consumer Price Index for November was pegged at an annual rate of 2.7%, accelerating from the 2.6% pace recorded in October and reaching the highest level since July.
On a monthly basis, price pressures edged 0.3% higher, modestly faster than last month’s advance of 0.2%. The monthly figure rose despite a 2.63% decline in domestic gasoline prices.
Both headline tallies matched Wall Street’s forecasts.
So-called core inflation, which strips out volatile components like food and energy, held at an annual rate of 3.3%, matching Wall Street’s forecast and pegged at the lowest rate in more three years.
The monthly core reading of 0.3% was also in line Wall Street forecasts and matched the final October reading of 0.3%.
Fed Chair Jerome Powell xxx
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U.S. stocks added to gains following the data release, with futures contracts tied to the S&P 500 suggesting a 25-point opening-bell gain and those linked to the Dow Jones Industrial Average priced for a 76-point bump. The tech-focused Nasdaq, meanwhile, is called 125 points higher.
Related: Jobs report stokes Fed interest rate cut bets
Benchmark 2-year Treasury note yields eased 3 basis points to 4.134% while 10-year notes slipped 2 basis points to 4.221%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.19% lower at 106.605.
CME Group’s FedWatch, meanwhile, suggests an 86% chance that the Fed will lower its benchmark lending rate by 0.25 percentage point next week in Washington, up from around 65.3% in early November.
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Last week, the Labor Department issued a stronger-than-expected November jobs report, which included 227,000 new hires and faster wage growth as activity rebounded from the strike- and hurricane-affected readings from October.
Average hourly earnings in November rose 0.4% from prior-month levels and were up 4% on an annual basis, the BLS said, with both tallies topping Wall Street forecasts.
The headline unemployment rate, however, edged higher to 4.2%, while the labor force participation rate slipped modestly to 62.5%.
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