Why November's Inflation Numbers Might Be Tricky

John Williams, the head of the New York Federal Reserve, recently discussed potential inaccuracies in November's inflation numbers. He highlighted that technical issues may have affected the data collection process.

Data Collection Problems Impact November CPI

Due to problems collecting data in October and early November, the November Consumer Price Index (CPI) might be misleading, particularly in certain categories. This could have resulted in an underreported inflation rate.

The CPI showed a 2.7% annual increase, which was lower than economists' predictions. Williams suggested that this discrepancy might be due to data being collected mostly in the second half of November, a period marked by significant sales. This could have skewed the numbers, especially in areas like rent and other categories.

Signs of Disinflation Despite Data Issues

Despite these concerns, Williams noted some positive trends in the data. Certain categories not affected by these issues showed signs of cooling price pressures, indicating that the overall trend of disinflation might still be in progress.

October CPI Report Canceled, November Data Incomplete

The October CPI report was canceled, leaving the November report without all the usual data points. The Bureau of Labor Statistics had to rely on alternative sources to fill in the gaps.