Consumer prices rose 3.1 percent over the past year as annual inflation continued to decline, according to data released Tuesday by the Labor Department.
The Labor Department’s consumer price index (CPI) fell from an annual inflation rate of 3.2 percent in October after prices rose just 0.1 percent last month.
Economists expected the annual inflation rate to fall to 3.1 percent after another month of prices holding steady.
The new inflation data comes as Federal Reserve officials meet for the final time this year and mull whether to hike, cut or maintain baseline interest rates.
The Fed is expected to keep rates unchanged Wednesday at the conclusion of the two-day meeting after a year of remarkable progress in its inflation fight.
The annual inflation rate has fallen from 6.4 percent in January and 9.1 percent in June 2022 without the economy falling into a widely feared recession. Only 3.7 percent of American workers were unemployed in November, according to Labor Department data.
The Fed’s rate-setting panel has held interest rates steady for months since hiking them to a baseline range of 5.25 percent to 5.5 percent in July. With inflation on its way down and rates at a 22-year high, the Fed is now facing questions about when it will cut rates.
The steep increase in interest rates has slowed consumer spending and throttled the housing market, where buyers are facing mortgage rates close to 8 percent. Even so, the job market and overall economic growth have remained far stronger than expected by economists.
Fed officials are wary of declaring victory against inflation, which is still roughly 1 percentage point above their annual target of 2 percent. Top Fed leaders have not ruled out future rate hikes if price growth accelerates, but they are also hesitant to keep rates too high for too long.
Updated at 9:42 a.m.