The U.S. Department of Labor released the Consumer Price Index (CPI) data for November 2025 in mid-December. This report has attracted a lot of attention because it is the first comprehensive inflation indicator the market has received since the government shutdown in October. The results are somewhat interesting — overall inflation is indeed lower than expected, but there are quite a few issues with the data itself.

**Numbers look good on the surface, but the details are painful**

The November CPI year-over-year increase was 2.7%, breaking the market expectation of around 3%. Compared to 3.0% in September, there has been a decline. The core CPI (excluding food and energy) also stood at 2.6%, indicating a slowdown as well.

However, there is an awkward point — because the October CPI data could not be fully collected due to the government shutdown, the November report directly lacks month-over-month (MoM) data. Without the previous month as a reference, even if the year-over-year increase has decreased, it’s hard to determine whether prices are truly cooling in a trend or if it’s just a change in statistical methodology. In other words, this is more like a "partial inflation snapshot" rather than a continuous trend.

**Official data is cooling, but your wallet doesn’t feel it**

Although the CPI shows inflation is slowing, the problem is that price levels are still far above the Federal Reserve’s long-term target of 2%. In real life, this improvement isn’t very noticeable:

Energy and transportation costs are still pushing overall prices higher. Rents, healthcare, and various service prices remain sticky and hard to bring down. The pressure on daily expenses like eating out, commuting, and living costs has not eased in tandem with the CPI decline.

For investors, this means the Fed’s room for future rate cuts might not be as large as expected. Inflation is on the way down, but it hasn’t fully gone away yet.