Inflation report comes in cooler than expected, at 2.7% annual rate

Consumer prices rose at a lower-than-expected rate for the year leading to November, the Department of Labor said Thursday in its first major inflation report since the government shutdown.

The Consumer Price Index showed prices rose at an annualized rate of 2.7%, an improvement from the September report’s 3% increase.

Wall Street had expected a rise of 3.1%, so the report is welcome news for President Trump, who faces pressure over affordability heading into the midterm season.

The inflation rate remains above the Federal Reserve’s target rate of 2% but is trending in the right direction.

U.S. stocks surged after the report, with all the major indexes trading in positive territory.

White House officials attributed the cooling inflation rate to Mr. Trump’s efforts to cut government spending, slash regulations and drill to boost energy supplies.

“The latest inflation data shattered expectations once again, with core inflation — often called the best measure of inflation — at its lowest since March 2021,” the White House rapid response team said on X. “More progress. Inflation is down, gas is down, wages are up — and the best is yet to come.”

The Bureau of Labor Statistics issued its CPI numbers for the first time since October, when it reported September figures to help the Social Security Administration set cost-of-living adjustments in benefit checks.

Otherwise, the agency delayed reporting on jobs and inflation due to the government shutdown from Oct. 1 to Nov. 12 and is catching up on data releases this month. Some data from October was missing due to the shutdown.

Utility costs and used cars were drivers of inflation, and there were large gaps in the data for October and November.

Inflation increased 0.2% on a seasonally adjusted basis over the two months from September to November.

Economists, consumers and politicians are watching the inflation numbers after Mr. Trump pledged to bring down soaring costs from the Biden years and issued sweeping tariffs on imports, which could raise some prices.

Mr. Trump is hitting the road to explain his economic agenda to the American people and on Wednesday gave a primetime address designed to allay economic fears and promise a better year ahead on the 250th anniversary of the country’s founding.

“We’re poised for an economic boom the likes of which the world has never seen before,” the president said. “There could be no more fitting milestone than to complete the comeback of America that began just one year ago.”

Democrats say Mr. Trump’s economic agenda, notably his tariffs on foreign goods brought to the U.S., is backfiring on Americans.

Democratic National Committee Chairman Ken Martin said Mr. Trump is trying to sell Americans a “s—- sandwich” and is “desperate to convince the American people — and even convince himself — that he isn’t a complete and utter failure.”

The president tried to ease prices by slashing tariffs on coffee, bananas and other products that cannot be grown in sufficient amounts to meet U.S. demand.

Yet Mr. Trump is defending his levies overall, saying they forced drugmakers, automakers and others to build factories in the U.S. and create jobs.

Mr. Trump also says tax cuts from GOP legislation and changes at the Federal Reserve will jump-start the economy.

Plus, the president is promising cash payments. He floated a $2,000 payment to low- and middle-income Americans from tariff revenue.

And during his speech, he said more than 1.4 million service members will receive a check for $1,776 — playing off the year America declared independence — this Christmas season.