In November, the cost of living in the United States showed a modest deceleration compared to two months prior, yet a substantial majority of Americans — nearly three-quarters — are still struggling to meet their monthly financial obligations. This persistent challenge underscores deep-seated anxieties about economic accessibility and its broader implications for household well-being and governmental approval.
Data released by the Labor Department indicated that consumer prices increased by 2.7% over the past year leading up to November. This figure represents a slight improvement from the 3% annual inflation rate recorded in September. Between September and November, prices saw an increment of 0.2%. However, a direct comparison for October was unavailable due to a government shutdown that halted routine price data collection. Some analysts, including Omair Sharif of Inflation Insights, suggest that the absence of rental market data for October might have inadvertently contributed to a lower reported inflation figure for November.
These economic statistics emerge against a backdrop of increasing public dissatisfaction regarding living costs, which has negatively impacted President Trump's approval ratings. A recent survey conducted by NPR/PBS News/Marist revealed that only 36% of Americans endorse the President's economic management. This marks his lowest economic approval rating in six years, mirroring a similar low point for former President Biden in 2022.
The elevated cost of goods and services is overshadowing other economic concerns, with 71% of survey participants reporting that their earnings either barely cover or fall short of their monthly expenses. While certain food items, such as eggs, saw price reductions, these gains were largely offset by rising costs for housing and electricity over the last year.
Although average wages are generally increasing faster than prices, the rate of wage growth has softened in recent months. Coupled with a cooling job market, workers now possess less leverage to demand significant pay raises. Federal Reserve Governor Chris Waller, speaking at Yale University's CEO Summit, noted that while affluent families remain largely unaffected by price increases, low- and middle-income households confront a serious 'affordability crisis.' Waller emphasized the need for either renewed wage growth or a successful reduction in inflation to stabilize prices.
Opinions diverge within the Federal Reserve regarding the future trajectory of inflation. Waller, a potential successor to Fed Chairman Jerome Powell, expressed confidence that inflation would temper in the coming year. Nevertheless, other policymakers are less optimistic. Inflation has consistently exceeded the central bank's 2% target for more than four years. Raphael Bostic, the outgoing president of the Atlanta Federal Reserve Bank, voiced concerns that prolonged high inflation could lead the public to expect its persistence, potentially undermining the Fed's credibility in managing price stability.
Last week, the Federal Reserve opted to reduce its benchmark interest rate for the third time since September, aiming to bolster the employment market. However, members of the rate-setting committee indicated a cautious approach to further rate cuts. The NPR/PBS News/Marist poll further highlighted that 45% of respondents consider high prices their primary economic worry, significantly outweighing the 10% who are most concerned about job security.
The recent inflation data, indicating a slight moderation in consumer price growth, arrives at a critical juncture for American households grappling with persistent affordability issues. The ongoing economic challenges continue to shape public sentiment and policy debates, with the Federal Reserve navigating complex decisions to ensure both price stability and economic growth.