US Inflation Expected to Rise Following Mixed November CPI Data

As 2025 came to a close, U.S. consumers likely saw only a modest increase in inflation, reflecting price pressures that continue to ease gradually. The core consumer price index which excludes volatile food and energy costs and is widely regarded as a gauge of underlying inflation is expected to rise 2.7% in December compared with a year earlier. That’s slightly above November’s 2.6% annual increase, which was the smallest since early 2021.

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On a monthly basis, economists forecast 0.3% gains for both headline and core CPI. The Bureau of Labor Statistics (BLS) was unable to release month-over-month changes in the previous report due to the longest government shutdown in U.S. history, which delayed data collection.

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Analysts note that November’s figures, which showed a broad cooling in inflation, were skewed by the BLS’s inability to gather most prices in October, as well as the assumption that key rent indices remained largely unchanged. This contributed to significant downward pressure on the November report, leaving December’s release slated for Tuesday with the potential to correct that distortion.

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The lack of clean, up-to-date inflation readings, combined with signs that the U.S. labor market is stabilizing after a streak of weak payroll reports, helps explain why Federal Reserve officials are widely expected to keep interest rates steady in the near term.

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New York Fed President John Williams kicks off a busy week of central banker appearances on Monday. Other officials expected to speak on economic conditions include Alberto Musalem, Anna Paulson, Michelle Bowman, and Philip Jefferson. Their comments will be closely watched by investors seeking insight into future monetary policy.

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Meanwhile, consumer spending in the fourth quarter remains robust. Government data due on Wednesday is projected to show another healthy increase in retail sales. Excluding auto dealerships, economists expect November retail sales to rise 0.4%, matching October’s advance.

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Other key domestic reports scheduled for the week include October new-home sales, the November producer price index, and December readings on industrial production and existing-home resales.

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Looking beyond the U.S., Statistics Canada is set to release data on securities transactions following a surge in foreign investment in Canadian equities and bonds. Manufacturing and wholesale sales figures will also be published, while travel data are expected to confirm a continued decline in Canadian visits to the U.S. Sub-provincial population estimates will provide insight into the effects of stricter immigration policies.

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Globally, investors will be watching a range of economic indicators in the coming days. Highlights include Indian inflation data, economic growth figures from Germany and the U.K., and an anticipated decision by South Korea to maintain current borrowing costs. Additionally, remarks from Group of Seven finance ministers meeting in Washington at the start of the week could influence market sentiment.

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With multiple domestic and international reports on the horizon, investors will be assessing whether underlying inflation continues to ease, how consumers and businesses are responding, and what central banks’ next moves might be.