US inflation rises as Americans’ confidence improves

Ironically, the improvement in sentiment is arriving just as progress containing prices has appeared to stall.

The 2.7% inflation rate for November had been expected.

But it was up from 2.6% in October, marking the highest rate since July.

Gas prices – though down 8.1% compared with 2023 – rose 0.6% from October, while grocery prices jumped 0.5% over the month.

Prices of used cars, household furnishings and medical care also climbed.

The situation has raised questions about how Trump will deliver on his promises to lower prices for Americans – and what the US central bank, which wants to see an inflation rate of about 2%, should do next.

“Inflation has been coming steadily back into focus in the US,” said Lindsay James, investment strategist at Quilter Investors.

“This is due in part to the lack of progress that has been made over the last three months, but also because of concerns that higher US government spending plus the introduction of Trump’s tariffs could create a more inflationary backdrop.”

The US central bank lowered interest rates for the first time in more than four years in September, citing the progress stabilising prices.

Many analysts still expect officials to announce another cut to interest rates at their meeting this month, but they have warned that rates are likely to stay higher than previously expected next year unless price increases in areas outside of petrol start to ease more significantly.

That’s a conclusion that will come as no surprise to Americans like Grier Bowen.

The 48-year-old was diagnosed with cancer in 2017 and now relies on disability payments from the government, which she said have not kept up as expenses shot up in recent years.

Though the situation has been helped by lower petrol prices, she said the savings were not enough to offset higher costs elsewhere.

“You may save here but you’ve got to now reallocate somewhere else,” she said.

Ms Bowen said she thought Trump would try to shake things up but she has yet to be convinced he will make a difference for the better.

“That’s yet to be determined,” she said.