
U.S consumer price index improved to 0.3% in November
- U.S consumer price index beats analysts estimate of 0.2% in November.
- The economic data on Wednesday hinted at the U.S underlying inflation to have firmed in November.
- The report added that the food prices have hiked for three consecutive months.
- U.S core PCE price index for November is set to be announced in the upcoming weeks.
- The U.S dollar index didn't respond aggressively to the U.S consumer price index.
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The U.S Bureau of Labor Statistics announced its monthly consumer price index earlier on Wednesday. As per the report, November saw a sharp increase in U.S consumer prices. In combination with the optimism of the labor market at large, economists expressed that today’s data supports the Federal Reserve’s decision of putting the monetary policy on halt for the next few meetings after cutting rates three times in a row this year.
Wednesday’s Data Supports The Fed’s Decision Of Putting Monetary Policy On Halt
Copy link to sectionWednesday’s data also hinted at the U.S underlying inflation to have firmed in November. The report was announced ahead of the Fed’s policy meeting that spanned over two days and is set to conclude later today. In light of the U.S consumer price index, the Federal Reserve is expected to leave rates untouched, as hinted in October following Fed’s third rate cut for 2019.
The Labor Department had noted the U.S consumer price index at 0.4% in October, following which, analysts had forecasted the index to drop to 0.2% in November. Printing 0.3% in November, it beat the estimate and strengthened the claims of stability in the U.S economy.
Despite being lower than October’s figure, economists construed the index to be sufficiently strong for the U.S economy. The report also added that the food prices hiked for three consecutive months while payments made by the U.S households for gasoline were also higher. In terms of year over year gain, analysts had expected a 2.0% gain in the U.S consumer price index while the Bureau of Labor Statistics announced a 2.1% increase.
Analysts And Traders Are Now Waiting For the U.S Core PCE Price Index For November
Copy link to sectionThe U.S core PCE (personal consumption expenditures) price index is of special interest for the Federal Reserve as it provides a valuable insight into how the economy is aligned with the target of 2.0% inflation annually. The core PCE price index printed a 1.6% gain in October (year-over-year). Data for November is expected to be released in the upcoming weeks.
Although the U.S dollar index responded to the economic data, the movement was as prominent as expected. Having opened at 97.39 on Wednesday, the index printed a daily high of 97.56 following the report. The gains were, however, unsustainable, with the index currently trading at 97.40 level again.
The impact of the temporary gain in the U.S dollar index wasn’t too accentuated against the other prominent currency pairs in the forex market either. Eur/Usd and Gbp/Usd were seen trading sideways following the report.
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