U.S. Inflation Drops to 2.7% in November, Markets and Crypto Surge

U.S. inflation slowed to 2.7% in November, below forecasts. Core inflation eased to 2.6%. Markets and cryptocurrencies rallied on the news, anticipating possible Fed rate cuts. Unemployment rose to 4.6%, signaling economic cooling.

U.S. inflation cooled more than expected in November, with the Consumer Price Index rising 2.7% year-over-year, below the 3.1% forecast and down from September's 3.0%. Core inflation, excluding food and energy, also eased to 2.6%. The data, released after a government shutdown disrupted October's collection, signaled a broad disinflationary trend. Energy prices rose 4.2% annually, while food prices increased 2.6%. The softer inflation figures boosted financial markets and cryptocurrencies, with Bitcoin prices surging as investors anticipated a potential shift in Federal Reserve policy toward rate cuts. The unemployment rate climbed to 4.6%, the highest since 2021, raising concerns about economic slowdown. Analysts noted that the partial data collection in November, coinciding with holiday discounts, may have influenced the results. Overall, the report was seen as a positive surprise, easing pressure on households and markets, though inflation remains above the Federal Reserve's 2% target.