Current Inflation Index Reports and Fed Policy/Actions

explanade said:
Powell attributed at least some of the current inflation to tariffs.
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Yes..I think that is one of the reasons they are cutting. Despite the tariff drag inflation is muted. And next year you will no longer have tariff hikes as we have this year. In fact they have been going in the opposite direction more recently.
 
Just did a pro forma back-of-napkin look at my taxes. The higher interest bills and notes are coming home to roost this year. Not a bad thing. I guess I won't have to worry as much next year since my current bills and notes are not as generous.
 
audreyh1 said:
Thanks for keeping this thread going. With some release dates moving around it’s been hard to keep up. I just got back from Costa Rica (highly recommended).

The next CPI release is Dec 18.
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My wife and I have been to Costa Rica three times so far, with another trip planned there in 2026. We call it our "happy place".
 
Vincenzo Corleone said:
My wife and I have been to Costa Rica three times so far, with another trip planned there in 2026. We call it our "happy place".
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It is definitely a happy, peaceful and beautiful place. Much closer for us than Hawaii (3 hours 20 mins from Houston). So we may indeed hop over often. Loved the monkeys, especially the pre-dawn Howler Monkey roars.
 
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November 2025 CPI Report released today. 0.2% increase since September, 2.7% last 12 months.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis over the 2 months from September 2025 to November 2025, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment. BLS did not collect survey data for October 2025 due to a lapse in appropriations.
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IMG_8438.jpeg

 
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They said they didn’t account for inflation in the housing sector so some may put an asterisk on this report.
 
explanade said:
They said they didn’t account for inflation in the housing sector so some may put an asterisk on this report.
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I'm guessing a lot of such reports need an asterisk for one reason or another.
 
MichaelB said:
I think this report should be disregarded. It’s incomplete in ways we cannot properly assess.
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I guess we'll wait for next month's report. If there is a trend, we'll see it then. Fingers crossed.
 
Boy I really got stumped for a while with the BLS cumulative inflation calculator because it was showing a lower cumulative inflation for Nov 25 compared to Sept 25. But it turns out that unadjusted CPIU really did drop from September to November. FRED has a graph of the unadjusted CPIU index Consumer Price Index for All Urban Consumers: All Items in U.S. City Average. They have a break in the graph for October 2025. That series is what is used by the cumulative inflation calculators.
 
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Fortunately it is a series and the shutdown effects on data collection will presumably become noise when this month's full survey is done. Whatever the reading is for December should correct shutdown discrepancies.
 
USGrant1962 said:
Fortunately it is a series and the shutdown effects on data collection will presumably become noise when this month's full survey is done. Whatever the reading is for December should correct shutdown discrepancies.
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Yeah, not too worried about that aspect since it will “wash out” over time. Also unadjusted does have seasonal variations which is why the month to month data is seasonally adjusted. We occasionally see this kind of discrepancy even with no shutdown.
 
Q3 initial real GDP came in at 4.3% compared to 3.8% in Q2.

Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)

www.bea.gov www.bea.gov

I'm a bit surprised it is this strong and even accelerating but capital spending growth may be a part of the reason. If so perhaps this is a durable trend with AI hardware purchases coupled with equipment expensing from the OBBB kicking in next year.

With our labor force growing only modestly, more capital equipment investment may not only make sense, it may be essential.
 
Jobs report for Dec was mixed, with hiring at 50k vs 73k estimate. Unemployment went down to 4.4% versus expectations of 4.5%.

But more bad jobs news in the revisions. December was revised downward by 8k and November by 68k to a whopping 173k decline. So for the last 3 months the economy recorded net job losses.

Big picture is trend is clearly down and even these figures are likely to be revised down further.

www.cnbc.com

U.S. payrolls rose 50,000 in December, less than expected; unemployment rate falls to 4.4%

The report presented a muddy view of the labor market, with companies reporting a low level of hiring but households showing employment gains.
www.cnbc.com www.cnbc.com
e
 
IIRC, many of the Federal employees who signed up for “early retirement” earlier in the year actually were removed from the books as of the start of the new fiscal year in October. That may be contributing to the unemployment increase.
 
Someone on CNBC said that most of the jobs created in 2025 were only through April or May and the rest of the year has been net negative.
 
Montecfo said:
Jobs report for Dec was mixed, with hiring at 50k vs 73k estimate. Unemployment went down to 4.4% versus expectations of 4.5%.

But more bad jobs news in the revisions. December was revised downward by 8k and November by 68k to a whopping 173k decline. So for the last 3 months the economy recorded net job losses.

Big picture is trend is clearly down and even these figures are likely to be revised down further.

www.cnbc.com

U.S. payrolls rose 50,000 in December, less than expected; unemployment rate falls to 4.4%

The report presented a muddy view of the labor market, with companies reporting a low level of hiring but households showing employment gains.
www.cnbc.com www.cnbc.com
e
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I’m a bit skeptical so I looked at at the Daily Treasury Statement. Comparing the months of December 2024 and 2025 it reports FICA taxes paid $348B vs $330.8B, a YoY increase of 5.2%. If wages rose 3%-3.5%, that leaves employment growth at 1.7%-2.2%, which would translate to around 3 millions jobs.

It’s possible the employment picture isn’t as bad as it appears.
 
I know that no one talks about it out loud, but one of the ways that the Fed's (former) tightening of rates lowers inflation is (or usually causes) some increase in unemployment. I don't think anyone really thought we were going to WIN (Whip Inflation Now - remember it got to 9%) without some j*b casualties. Yes, the Fed is slowly unwinding some of their tightening but nothing happens overnight. My perspective is that we actually got lucky in the j*bs market. We've apparently dodged a more typical recession - with all the j*b loss that usually brings. The economy actually appears to be doing extremely well, 401(k)s are up, stock market is up, oil is reasonably stable. The economy may be poised to do even better this new year. (I'll believe that when I see it).

I'm no economist but I'm seeing a lot more "doom and gloom" from "we the people" than seems consistent with our actual situation. I could be wrong. Maybe we're just ready to sail off the edge of the Earth and I don't see it.
 
I am unsure if the unemployment rate is real though.
 
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