Economists expect prices to rise by 3% in November.
Washington, D.C., and Wall Street will be closely watching the release of inflation data on Tuesday that is set to show whether price rises have continued to slow in November or challenged further advances.
The new data will arrive a day before the Federal Reserve decides on a potential escalation of a string of near-historic interest rate hikes, raising risks for the Bureau of Labor Statistics’ inflation report.
Economists expect prices to rise by 3% in November, which represents a slight slowdown from the inflation rate recorded in the previous month.
The expected number will indicate progress in combating rising prices, but will not reach the level of the significant reduction achieved in October.
Inflation has fallen significantly from its peak of about 9% last summer, but remains more than a percentage point above the Fed’s target.
Since last year, the Federal Reserve has raised its benchmark interest rate at the fastest pace in more than two decades in an attempt to slow rate increases.
This series of decisions raised interest rates on everything from credit card loans to mortgages, while at the same time consumers remained under pressure from higher rates.
Interest rate increases appear to have slowed some areas of the economy, suppressing the housing market and discouraging companies from making major investments that would incur burdensome borrowing costs.
The economy maintained strong employment growth last month, but fell well below the rapid pace it showed over the previous year, according to data from the Federal Reserve. Bureau of Labor Statistics It showed on Friday.
However, consumer spending has proven resilient. Black Friday sales have been a huge success as the country enters a holiday shopping season expected to test shoppers representing nearly three-quarters of US economic activity.
Consumers spent a record $9.8 billion online on Black Friday, representing a 7.5% increase over the previous year, according to Adobe Analytics data reviewed by ABC News.
Resilient holiday spending could provide additional fuel to the economy as observers hope for continued expansion but fear downward pressure imposed by higher interest rates.
Recently, economics has criticized such concerns. Gross domestic product grew at an annual pace of 4.9% over the three months to September, more than double growth in the previous quarter and alleviating concerns about a potential recession, a report from the European Central Bank said. Bureau of Economic Analysis In October he showed.
Taken together, the mixed signals emanating from the economy in recent months have complicated the Fed’s efforts to lower inflation while avoiding a recession, an outcome known as a “soft landing.”
In theory, the economy should eventually falter as borrowing becomes more expensive for businesses and consumers. However, the economy has so far resisted the overall slowdown.
Speaking at a news conference in Washington, D.C., last month, Federal Reserve Chairman Jerome Powell acknowledged the complex economic picture facing the central bank.
“Inflation has declined but is still well above our 2% target,” Powell said. He said. He added: “Given how far we have come, coupled with the uncertainties and risks we face, the committee is acting cautiously.”
Powell said that while mixed economic data creates a great deal of uncertainty, the status of the Fed’s inflation battle remains clear, indicating that the task will require a further slowdown in price increases.
“The process of sustainably lowering inflation to 2% still has a long way to go,” Powell said. “We remain strongly committed.”
However, Powell appears to be weighing the need for continued progress on lowering inflation against expectations of the yet-to-be-realized effects of the central bank’s previous interest rate hikes, also known as policy tightening.
“Monetary policy is believed to be lagging in on economic conditions, and it is likely that the full effects of our tightening have not yet been felt,” Powell said. He said at Spelman College in Atlanta, Georgia, earlier this month.