New Delhi [India], December 19 : US consumer price inflation rose below market expectations in November, though concerns remain over data accuracy due to disruptions caused by the government shutdown, according to ICICI Bank Global Markets Research.
Headline CPI inflation moderated to 2.7 per cent year-on-year in November, while sequential inflation also softened to 0.2 per cent on a two-month basis from September to November.
"The US CPI report which was delayed by the shutdown showed that inflation rose below expectations in November at 2.7 per cent (exp: 3.0 per cent). On a sequential basis too, inflation rose at a softer pace of 0.2 per cent MoM from September to November" said the report.
Core inflation printed at 2.6 per cent year-on-year, marking its slowest annual pace since early 2021 and undershooting expectations.
The research note highlighted that core goods prices rose modestly by 0.2 per cent over the two-month period, restrained by declines in hotel stays, recreation and apparel costs, while core services inflation remained unchanged at 0.2 per cent month-on-month. Shelter inflation eased further, rising 3.0 per cent year-on-year, the lowest increase in over four years.
However, ICICI Bank cautioned that the reliability of the CPI data remains questionable as no data was collected in October due to the shutdown, with collection resuming only in mid-November. "concerns about the accuracy of this print remain in place given that there was no data collection in October and that it did not start until mid-November. Hence, it is quite possible that these latest estimates are distorted and possibly exaggerating the disinflation trend that was visible" noted the report.
The Bureau of Labor Statistics relied partly on non-survey data sources, raising the possibility that the current print may exaggerate the disinflation trend.
Food inflation eased to 2.6 per cent year-on-year, supported by lower prices in food-at-home categories, while energy inflation rose to 4.2 per cent, driven by fuel oil, electricity and natural gas prices. The bank expects cooling global energy prices to exert downward pressure on energy inflation going forward.
Looking ahead, ICICI Bank said the December CPI print, scheduled for release on January 13, 2026, will offer a clearer picture of underlying price pressures. Inflation may remain sticky in the first half of 2026 due to tariff pass-through, though core services inflation is expected to soften amid slowing demand and weakening labour market conditions.
On monetary policy, the report said the US Federal Reserve is likely to remain data-dependent, maintaining a status quo in the January 2026 policy meeting, followed by a cumulative 50 basis points rate cut over the course of 2026.
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