Inflation eases some, but grocery prices continue to put pressure on the household budget

Inflation in the United States slowed again last month in the latest sign that price increases are cooling despite the pressures they continue to inflict on American households. Grocery prices remain a trouble spot. They surged 0.5% from October to November and are up 12% compared with a year ago.

Consumer prices rose 7.1% in November from a year ago, the government said Tuesday. That was down sharply from 7.7% in October and a recent peak of 9.1% in June. It was the fifth straight decline.

Measured from month to month, which gives a more up-to-date snapshot, the consumer price index inched up just 0.1%. And so-called core inflation, which excludes volatile food and energy costs and which the Federal Reserve tracks closely, slowed to 6% compared with a year earlier. From October to November, core prices rose 0.2% – the mildest increase since August 2021.

Where can I find the best prices on grocery staples this week?

"It’s ridiculous," she said. "I’m still struggling. I have three kids. I am a single mom."

Inflation has changed her family's menu.

"They’re doing noodles. They’re doing lunch meats. They’re doing sandwiches – whatever they can put in their belly and still survive," she said.

Alma Quintera said that even with her husband working full time as a house painter, they have to visit the food bank two or three times a month to adequately feed their three school-age children.

“The high prices have really affected us — the rent, the bills and especially the food,” she said.

He doesn't expect prices to drop, but they may stop rising by late next year.

Faye Prosser, WRAL SmartShopper, suggests that families plan meals and shop around for deals, rather than stick to just one store.

Are you getting a good deal on your groceries? Five On Your Side tests 5 stores

Gas prices have tumbled from their summer peak. The costs of used cars, health care, airline fares and hotel rooms also dropped in November. So did furniture and electricity prices. Housing costs jumped, though much of that data doesn’t yet reflect real-time measures that show declines in home prices and apartment rents.

Economists say the latest inflation figures, though, suggest the likelihood of some relief in the coming months.

"Inflation was terrible in 2022, but the outlook for 2023 is much better," said Bill Adams, chief economist for Comerica Bank. “Supply chains are working better, business inventories are higher, ending most of the shortages that fueled inflation in 2020.”

President Joe Biden called the inflation report “welcome news for families across the country” and noted that lower auto and toy prices should benefit holiday shoppers. Still, Biden acknowledged that inflation might not return to “normal levels” until the end of next year.

Wall Street welcomed the better-than-expected inflation data as providing further support for the Fed to slow and potentially pause its rate hikes by early next year.

On Wednesday, the Fed is widely expected to raise its benchmark rate by a half-point, its seventh hike this year. The move would follow four three-quarter-point hikes in a row. A half-point increase would put the Fed's key short-term rate in a range of 4.25% to 4.5%, the highest in 15 years.

Fed Chair Jerome Powell has said he is tracking price trends in three separate categories to best understand the likely path of inflation: Goods, excluding volatile food and energy costs; housing, which includes rents and the cost of homeownership; and services excluding housing, such as auto insurance, pet services and education.