Inflation Trends in November

The latest data from the U.S. Commerce Department shows that inflation, as measured by the personal consumption expenditures (PCE) price index, reached 2.8% in November 2025.

This figure is slightly above the Federal Reserve's target but aligns with market expectations. The rate for October was reported at 2.7%, indicating a consistent rise in inflation with both months reflecting a 0.2% increase month-over-month.

Personal Income and Consumer Spending

In November, personal income saw a modest increase of 0.3%, following a 0.1% rise in October. However, this figure fell short of forecasts by 0.1 percentage point.

Meanwhile, personal consumption expenditures, a key indicator of consumer spending, also grew by 0.5% in both months, suggesting that consumer activity remains strong despite inflationary pressures.

Changes in Personal Savings Rate

The report noted a decline in the personal savings rate, which fell to 3.5% in November, down from 3.7% in October.

This drop indicates that consumers are spending a larger portion of their income, which could impact future savings trends.

Economic Growth Indicators

In addition to inflation and consumer metrics, the Bureau of Economic Analysis announced that the gross domestic product (GDP) increased by 4.4% in the third quarter of 2025.

This growth rate signals that the economy continues to expand, even as the labor market shows signs of cooling. Jobless claims have been trending at their lowest level in two years, reflecting a still-healthy job market despite other economic challenges.

Looking Ahead: Fed Policy Expectations

As these economic indicators unfold, markets anticipate that the Federal Reserve will keep interest rates unchanged in its upcoming policy meeting.

This follows three consecutive rate cuts in 2025. Traders are currently expecting a maximum of two rate reductions for the year, as policymakers balance the impact of previous easing measures with ongoing inflation concerns and geopolitical uncertainties.