Inflation slows, but Americans don't feel relief

Consumer price index last month rose just 2.7%, possibly due to the federal shutdown.

- BY ANNE D'INNOCENZIO

U.S. inflation slowed unexpectedly last month, according to data that were delayed, and probably distorted, by the government shutdown.

The Labor Department reported Thursday that its consumer price index rose 2.7% in November from a year earlier. Yet, year-over-year inflation remains well above the Federal Reserve's 2% target, and Americans are dismayed by the high cost of living.

The report was delayed eight days by the federal government's 43-day shutdown, which also prevented the Labor Department from compiling overall numbers for consumer prices and core inflation in October. Thursday’s report gave investors, businesses and policymakers their first look at the CPI since the September numbers were released Oct. 24.

Consumer prices had risen 3% in September from a year earlier, and forecasters had expected the November CPI to match that year-over-year increase.

“It’s likely a bit distorted,” said Diane Swonk, chief economist at the tax and consulting firm KPMG. “The good news is that it’s cooling. We'll take a win when we can get it.”

Still, Swonk added: “The data is truncated, and we just don’t know how much of it to trust.” By disrupting the economy — especially government contracting — the shutdown may have contributed to a cooling in prices, she said.