Long-awaited inflation data, delayed due to this fall’s federal government shutdown, came in surprisingly cool on Thursday. That helped fire up animal spirits on Wall Street, perhaps providing a modest lift across assets perceived as risky, including some agricultural commodities, but economists are taking the data with a dash of salt.
And meat prices, led by beef, remained red hot in November, something that could attract more attention from the White House.
The data
- The November consumer price index rose 2.7% year over year, down 3% from September and well below the 3.1% average forecast produced by a Wall Street Journal survey of economists. The closely watched core measure of inflation, which strips out volatile food and energy prices, rose 2.6% year over year, also coming in below economists’ expectations.
- Important note: There was no October CPI report due to the government shutdown, so there is no month-over-month figure.
- Caveat: The lack of some October data, which the Bureau of Labor Statistics said couldn’t be collected due to the shutdown, may be a source of other distortions. Of note, economists are skeptical of a flat two-month reading on certain shelter-related components of the report. “This looks like positive news overall, but the lack of detail and the absence of data collection during the shutdown introduce a degree of skepticism that’s hard to ignore. We’ll need to wait until next month for a clearer read on inflation,” said Olu Sonola, head of economic research at Fitch Ratings.
- Meat prices: The report showed meat prices rose 8.9% year over year, while ground beef was up 14.9%. That’s the largest year-over-year increase for meat since May 2022 and the largest for ground beef since July 2020, according to Bloomberg. President Donald Trump has repeatedly complained about beef prices, though demand has remained resilient in the face of rising prices. There is recent evidence of consumers beginning to shift away from pricier cuts. Trump has responded by expanding a tariff-free quota for Argentine beef and removing a punitive tariff on Brazilian beef imports, while also calling for a price-fixing probe of the packing industry.
Market reaction
- Stocks surged following the data and bonds rallied, pulling down yields which move opposite to price, with the data seen giving the Federal Reserve to continue cutting interest rates in 2026. Gains for stocks moderated by midday, with the Dow Jones Industrial Average up 77 points, or 0.2%, while the S&P 500 gained 0.7% and the tech-heavy Nasdaq Composite rose by 1.3%.
- Fed-funds futures, meanwhile, didn’t log much of a reaction to the data, with traders continuing to price in around 2 quarter-point rate cuts over the first half of 2026.
- The greenback found some modest support, with the ICE U.S. Dollar Index, a measure of the currency against a basket of six major rivals, up 0.1% after initially weakening after the CPI data.
- Grain futures saw volatile trading around the data release. March corn remains up 3 ¼ cents at $4.44 ¼, while March SRW was up 1 ½ cents at $5.07 ¾. Soybeans were dragged down by weakness in soyoil futures, with March beans down 6 ½ cents at $10.62 ¼.
- Live cattle futures lost ground, with February down $1.975; January feeders lost $1.625, while February lean hogs rose $1.025.