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The November Consumer Price Index released Tuesday shows inflation continues to moderate, rising 3.1% compared to a year ago. This pace is a slight decrease from the 3.2% annual rate for the 12-month period that ended in October. 

Gasoline prices and the cost of new cars and clothing were down but food and shelter costs remained elevated, according to the latest CPI report from the U.S. Bureau of Labor Statistics. 

The CPI data comes just as the Federal Reserve Board starts its two-day meeting to determine whether to increase short-term interest rates to cool down the economy and tame inflation. The central bank has said its goal is to reduce inflation to 2%. 

It is unclear how the latest inflation data will impact the Fed’s next decision on interest rates, which will be announced on Wednesday, Dec. 13. The stock market reaction was mixed. 

The Fed last raised the federal funds benchmark interest rate in July to a 22-year high of 5.25% to 5.50%. The Fed opted to forgo any further increases at its meetings in September and November amid signs inflation was cooling but signaled the possibility of one more increase before the end of 2023 or in early 2024.  

There were no big surprises in the latest inflation data. Viewed on a monthly basis, the CPI all-items index increased 0.1% in November after remaining flat for the month of October. The all-items index is up 3.1% compared to November 2022. 

The cost of shelter rose 0.4% in November and is up 6.5% compared to November of 2022. 

Gasoline prices declined 6% in November and are down 8.9% compared to a year ago. Electricity prices increased 1.4% for the month and are up 3.4% on an annual basis. Natural gas prices rose 2.8% on a monthly basis but are down 10.4% on an annual basis.  

The food index increased 0.2% in November, a slower pace than the 0.3% monthly increase in October. Food prices are up 2.9% compared to a year ago. 

New vehicle prices were down 0.1% for the month but are still 1.3% higher than they were in November of 2022. The price of used vehicles increased 1.6% in November after four straight months of declines. Used vehicle prices are still down 3.8% compared to November of 2022. 

The apparel index dropped 1.3% for the month of November, but the index remained 1.1% higher than a year ago.  

The index for all items less food and energy increased 0.3% for the month of November. This index for so-called “core inflation,” which strips out more volatile food and energy prices, is up 4.0% compared to November of 2022.