Key Points
- November’s consumer price index report, due Thursday, will be the first inflation reading released since the U.S. government shutdown ended last month.
- The Bureau of Labor Statistics said the report “will not include 1-month percent changes for November 2025 where the October 2025 data are missing,” after October’s CPI was canceled during the 43-day shutdown.
- Whether inflation comes in closer to 2% or stays in the 3% range will be “paramount,” Interactive Brokers senior economist José Torres told CNBC.
Wall Street is bracing for Thursday’s release of the November consumer price index, a closely watched report that will be the first snapshot of inflation since the record-setting U.S. government shutdown wrapped up last month.
Economists surveyed by Dow Jones expect the data to show inflation running at a 3.1% annual pace. Core CPI, which strips out food and energy, is forecast to come in at 3.0% year over year. The CPI measures average price changes across a broad basket of goods and services that consumers buy every day.
Inflation Is Expected to Stay Uncomfortably Firm
Economists see little evidence of a rapid cooldown in consumer prices.
Why this data matters
The Consumer Price Index tracks average price changes across a broad basket of everyday goods and services. For markets and policymakers, it remains the most closely watched gauge of underlying inflation pressure.
The Bureau of Labor Statistics has already warned that the report will be incomplete. Because the October CPI was canceled during the shutdown, November’s release will not include month-over-month changes where October data are missing. September remains the most recent full inflation report, showing a 3.0% annual rate for both headline and core CPI.
“The psychological distinction between a two-handle and a three-handle is going to be paramount,” José Torres, senior economist at Interactive Brokers, said in an interview with CNBC.
While the consensus points to inflation holding near 3%, Torres believes both headline and core CPI could come in slightly lower, at 2.9%. He said the headline number could realistically land anywhere between 2.9% and 3.1%.
A 2.9% reading could give stocks a boost as 2025 comes to a close. Torres said that outcome could help spark a so-called Santa Claus rally and reinforce expectations for interest rate cuts in 2026. The Federal Reserve currently projects one rate cut next year.
“It really would strengthen monetary policy easing expectations in the last CPI report of 2025 if we could keep inflation in the twos rather than it increasing up to the threes,” Torres said. “That would open the door for more interest rate cuts next year.”
Not a ‘clean’ report
Even if the headline number surprises to the downside, some market watchers don’t expect a dramatic reaction. Victoria Fernandez, chief market strategist at Crossmark Global Investments, said a 0.1 percentage-point swing either way is unlikely to move markets in a big way. She also expects the Fed to remain in wait-and-see mode, even with a 2.9% reading.
“I think it’s going to be varied. This is not going to be a clean CPI number,” Fernandez said, pointing to the lack of month-over-month data and uncertainty around when the BLS was able to restart data collection.
President Donald Trump signed the funding bill to reopen the government on Nov. 12, ending the 43-day shutdown — the longest in U.S. history. That forced the BLS to delay November’s CPI release from its original Dec. 10 date.
“By the time the government actually opened, and they started collecting data, we were almost halfway through November,” Fernandez said. “You’re only getting the last half of the month. You have to wonder whether there’s some kind of bias in how prices behave later in the month versus the beginning.”
Fernandez expects the overall takeaway to be that inflation is still running too high and not clearly trending back toward the Fed’s 2% target.
“There’s a tremendous amount of uncertainty about where we’re headed,” she said. “We see weak trends in unemployment, household income under pressure, softer consumer spending — and at the same time, expectations for 14% earnings growth next year and strong revenues. The pieces don’t quite fit together.”
“We need more data before we can make a clear statement about the long-term outlook,” she added.
Since the shutdown ended, some delayed inflation data have started to surface, including the September personal consumption expenditures price index. However, investors are still waiting for the October and November PCE reports, which have not yet been rescheduled.
Meanwhile, delayed October producer price index data will be released alongside the November PPI report, now scheduled for Jan. 14.
