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(Bloomberg) — After long-awaited government data showed underlying US inflation cooled to a four-year low in November, economists agreed on at least this much: something was off.
In a report fouled by the record-long government shutdown, inflation in several categories that had long been stubborn seemed to nearly evaporate. Chief among those were shelter costs, which make up about a third of the consumer price index, but other categories like airfares and apparel notably declined.
Because of the shutdown, the Bureau of Labor Statistics couldn’t collect prices throughout October and started sampling later than usual in November. The so-called core CPI, which excludes food and energy, increased 2.6% in November from a year ago — the slowest pace since 2021 and below all estimates in a Bloomberg survey of economists.
Several forecasters pointed to the absence of that October data — which resulted in pages of blank spaces in the widely watched report — as effectively the same as assuming no price growth for the month. That culminated in sizable downward pressure on the November inflation figures, they said. Some noted the shortened collection period could have also skewed the data.
The titles of their analyses were telling: “Lost in Translation,” according to TD Securities. “Delayed and Patchy,” per William Blair, and a “Swiss Cheese CPI report” from EY-Parthenon.
“This one-of-a-kind report produced anomaly after anomaly, almost all pointing in the same direction,” Stephen Stanley, chief US economist at Santander US Capital Markets LLC, said in a note. “I think it would be unwise to dismiss the results entirely, but I also believe it would be rash to take them at face value.”
The shutdown limited the BLS’s ability to calculate standard month-over-month price index values, so it mostly observed changes from September to November instead. In FAQs and other supporting documents published the day before the report, the agency forewarned that some the data may not be totally trustworthy.
“If bimonthly CPI data are volatile, then less confidence should be placed in estimates for the missing months,” BLS said Wednesday in a document explaining how to approximate missing data points.
Housing Components
The biggest inconsistencies compared with more recent trends were in key housing categories, which have been a main driver of inflation in recent years. Some economists pointed out that a shockingly small 0.06% increase in primary rents on average over the two months, and a 0.14% average rise in owners’ equivalent rent, would only be possible if BLS essentially kept the October index values the same as a month earlier. That would represent no increase from September.
“There is no world in which this was a good idea, but here we are,” said Omair Sharif, president of Inflation Insights LLC.
The month-over-month changes for key housing categories will largely be sorted with the release of the December CPI — though they may look “high,” Sharif said. But the annual changes will likely be impacted for longer.
That’s because BLS samples several panels of households about their rents on a rolling six-month basis, so some of the errant October values may not fall out of the index until April.
Despite the idiosyncrasies, several economists maintained that inflation is cooling, just perhaps not as much as Thursday’s report would suggest.
“Through the noise, we believe inflation is slowing on trend, even if today’s reading overstates the magnitude of the slowdown,” Wells Fargo & Co. economists said in a note.
The title of their analysis was more direct: “Take It with the Entire Salt Shaker.”
–With assistance from Reade Pickert and Julia Fanzeres.
©2025 Bloomberg L.P.

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